2019 (6) TMI 900 - HC - Central Excise

Clandestine removal - removal of goods to the job worker DPPL without following the prescribed procedure and without cover of any prescribed documents, when in fact no such documents were prescribed - minor discrepancy in Appellant's records regarding entry of some of these goods in Appellant's recent records as the goods were manufacture long back in 1999-2000 and were simply lying in Appellant's premises - HELD THAT - We are satisfied that inference of clandestine removal of goods drawn concurrently by all the three authorities is not based merely on absence of any challan, under cover of which the goods are normally required to be removed. The inference is mainly on account of absence of contemporaneous record backing the theory that the goods were removed for purposes of reprocessing by DPPL on job work basis. The record indicates that Kopran Limited has a well organised system for documentation, when it comes to record of receipt of raw materials, production, stores and despatch. However, when it comes to goods in question, such documentation, is just not to be found. Even contemporaneous records such as entries in loading Register, Gate outward Register and Returnable Register make no entries in relation to the goods in question. This is certainly a circumstance which is required to be held against the appellants. Therefore, even if we were to accept Mr.Agrawal's case that there were no prescribed procedures under the Cenvat Rules or that there was no requirement of removal of such goods only under a cover of challan, that by itself will not suffice to interfere with the concurrent findings of fact recorded by three authorities. The scope of an appeal under Section 35G of Central Excise Act, 1944, is quite limited. The appellants have to make out a case of involvement of a substantial question of law in the context of challenge to findings of fact, perhaps, such a case can be made out only if perversity is demonstrated. In the record of findings of fact - In the present case, there is sufficient material on record to sustain the findings of fact recorded by three authorities concurrently. The view taken by the Tribunal is certainly, a plausible view based upon the material on record. Accordingly, these appeals give rise to no question of law, much less, any substantial question of law. Appeal dismissed - decided against appellant.

Summary

Issues involved:
Challenge to the final order made by the Customs, Excise & Service Tax Appellate Tribunal regarding the removal of excisable goods without payment of excise duty and compliance with prescribed legal procedures.

Detailed Analysis:

1. Challenge to Tribunal's Order:
The appeals in question challenge the final order dated 16th February 2017 made by the Customs, Excise & Service Tax Appellate Tribunal. The central issue revolves around the removal of excisable goods from the appellant's factory premises to another entity's premises without following prescribed procedures and documentation.

2. Allegations of Clandestine Removal:
The case involves allegations of clandestine removal of excisable goods from the factory premises of the appellant to another entity without payment of excise duty. The authorities based their findings on the absence of contemporaneous records supporting the claim that the goods were removed for reprocessing on a job work basis.

3. Legal Arguments - Appellant's Perspective:
The appellant's counsel argued that at the relevant time, there were no prescribed procedures for the removal of such goods under the Cenvat Credit Rules or the Central Excise Rules. They emphasized that the goods were removed under a letter clearly stating the purpose of reprocessing on a job work basis. The counsel contended that minor discrepancies should not lead to the inference of clandestine removal.

4. Defense of Impugned Orders:
The respondent's counsel defended the impugned orders, stating that the absence of a challan was not the sole basis for the findings of clandestine removal. They argued that the lack of contemporaneous records supporting the reprocessing claim raised doubts. The counsel highlighted the meticulous record-keeping of the appellant in other areas, making the absence of records for the goods in question suspicious.

5. Judicial Analysis and Dismissal of Appeals:
Upon reviewing the orders of the Adjudicating Authority, Commissioner (Appeals), and Tribunal, the Court found that the inference of clandestine removal was not solely based on the absence of a challan. The lack of contemporaneous records supporting the reprocessing claim was a crucial factor. The Court noted that the appellant's documentation system lacked records for the goods in question, which went against them. The Court also found discrepancies in the letter and statements provided by the appellant's representatives, further weakening their case. Ultimately, the Court dismissed the appeals, concluding that no substantial questions of law were raised.

6. Conclusion and Dismissal:
The Court dismissed all three appeals, emphasizing the limited scope of appeal under Section 35G of the Central Excise Act. The lack of substantial questions of law and the adequacy of material supporting the findings of fact led to the dismissal of the appeals. The Court found no grounds to interfere with the concurrent findings of the lower authorities and ruled against the appellants.

7. Costs and Final Order:
In the absence of any substantial questions of law, the Court made no order as to costs. The judgment concluded by dismissing all three appeals in the context of the removal of excisable goods without proper procedures and documentation.