2019 (5) TMI 221 - HC - Central Excise

Clandestine removal - Sitar and Sikandar Brand gutkha - change in the name of consignors - grounds for challenge taken by the appellants are that there is only a slight change in the name of different consignors mentioned in the LRs brought on record, but their addresses are same, therefore, they are same business entities - HELD THAT - All the companies mentioned in the recovered Lorry Receipts are different entities, therefore, the respondents cannot be held liable for any Lorry Receipts, which is not related to it - While deciding the dispute between the parties, learned CESTAT has not opined or held that the Lorry Receipts recovered during the search are not admissible, therefore, the argument advanced by the learned counsel for the appellant that the order of learned CESTAT is incorrect or illegal is not tenable. When all the business entities are independent business entities, then there is nothing wrong in holding that a business entity cannot be held responsible for any Lorry Receipts, which is not related to it. The dispute between the parties as well as order of the learned Tribunal is purely based upon appreciation of facts and keeping in view the nature of dispute, no question of law arises. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against final order passed by CESTAT regarding clandestine manufacture and supply of scented tobacco.
2. Challenge to show cause notice demanding Central Excise duty and penalty.
3. Appeal against order of Commissioner quashing the demand.
4. Appeal against CESTAT's final order directing re-determination of duty and penalty.
5. Dismissal of appeals by High Court and Supreme Court.
6. Adjudication of matter by Principal Commissioner confirming duty demand and penalties.
7. Appeal against original order dated 31.10.2016 before CESTAT.
8. CESTAT's decision directing verification of Lorry Receipts and raising duty demand only against specific company.
9. Grounds for challenge by the appellants.
10. Arguments supporting CESTAT's decision by respondents.
11. Analysis of CESTAT's decision by the High Court.

Analysis:

1. The case involved appeals against a final order by CESTAT concerning clandestine manufacture and supply of scented tobacco. The investigation revealed illegal activities by various companies leading to demand notices for Central Excise duty and penalties.

2. The Commissioner's order quashing the demand was challenged, leading to appeals before CESTAT. The tribunal partially allowed the appeal, directing re-determination of duty and penalties, which was further contested by the parties.

3. The High Court and Supreme Court dismissed subsequent appeals, upholding the evidence of clandestine activities. The Principal Commissioner then adjudicated the matter confirming duty demands and penalties against the companies involved.

4. The appellants challenged the original order before CESTAT, which directed verification of Lorry Receipts and duty demand against specific companies only. The grounds for challenge included discrepancies in names on Lorry Receipts and the interpretation of previous judicial decisions.

5. The respondents supported CESTAT's decision, arguing that each company mentioned in the Lorry Receipts was a separate entity, justifying duty demands against specific entities only. The High Court analyzed CESTAT's decision, emphasizing the independence of business entities based on separate assessments and registrations.

6. The High Court concluded that CESTAT did not err in its decision, as all business entities involved were independent, and no legal questions arose. Consequently, the appeals by the Revenue were dismissed, upholding CESTAT's order.