2019 (2) TMI 565 - AT - Central Excise

SSI Exemption - dummy unit - It was contended by the department that the appellants were removing the goods in the guise of removal for job work; during the investigation both Shri Charles D Silva and Smt. Helen Charles D Silva Proprietors of M/s. Aurrick Tools and M/s. Austin have accepted that M/s. Austin had no machinery and where with all to undertake job work like cutting/punching of aluminum sheets - Held that - The Commissioner (Appeals) has correctly held that duty at the normal rate for the period 01/03/2005 to 2006-2007 was payable as the appellants have failed to follow the procedures prescribed under Notification No.08/2003-CE dated 01/03/2003 - the duty liability of the appellants should be restricted to 01/04/2003 onwards only. Penalty - Held that - Equal penalty was imposed on Smt. Helen Charles D Silva while holding that Shri Charles D Silva was the person, who has established a dummy unit by using the name of Smt. Helan Charles D Silva of proprietor of M/s. Austin except the fact that her name has been used, no other positive and pro-active roles alleged on her part in the evasion of duty by the appellants. Therefore, we find that the penalty imposed on her needs to be commensurate with here offence and thus, requires to be reduced. Appeal allowed in part.

Summary

Issues:
1. Alleged creation of a dummy unit to evade Central Excise duty.
2. Applicability of notifications and procedures for job work.
3. Time limitation for demanding duty.
4. Imposition of penalties on the appellants.

Analysis:
1. The case involved the alleged creation of a dummy unit, M/s. Austin, by the appellants to evade Central Excise duty. The department contended that goods were removed under the guise of job work, leading to a show-cause notice seeking duty recovery. The Additional Commissioner and Commissioner (Appeals) confirmed the demand and penalties based on the establishment of M/s. Austin as a sham unit.

2. The appellants argued that M/s. Austin was an independent firm established in 2002, not opting for certain notifications but sending goods to them for job work. They claimed eligibility under Notification No.83/94-CE for job work and disputed duty liability. The lack of records by M/s. Austin was attributed to a procedural lapse, asserting their duty exemption for job work done.

3. The Revenue supported the findings of the Original Order-In-Original (OIO) and Order-In-Appeal (OIA), emphasizing the creation of M/s. Austin as a sham unit. Statements of the appellants and M/s. Austin's proprietors were cited as evidence, indicating no retraction of their involvement in the alleged evasion scheme.

4. Upon review, the tribunal upheld the duty confirmation but restricted the duty liability to a specific period, considering part of the show-cause notice as time-barred. The penalties imposed were adjusted, reducing the penalty on Smt. Helen Charles D'Silva due to her lesser involvement compared to Shri Charles D'Silva in establishing the dummy unit.

In conclusion, the tribunal affirmed the duty confirmation but modified the penalties, reducing the total penalty amount imposed on M/s. Aurrick Tools and Smt. Helen Charles D'Silva. The appeals were disposed of accordingly, maintaining duty liability and adjusting penalties based on the level of involvement in the alleged duty evasion scheme.