2019 (9) TMI 218 - AT - Central Excise

Clandestine manufacture and removal - Hellogen Bulbs - parallel invoices - the whole case of Revenue against these appellants is linked to the receipt of glass shells of Unit No.I with further allegation of manufacture of Automotive Bulbs and clandestine clearance - HELD THAT - The very basis of the demand (receipt of bulb shells /capsules), no longer remains in existence. The very basis for alleged manufacture and removal of the goods, no longer exists. In view of the findings of a Coordinate Bench of this Tribunal in the appellant s own case Unit M/S AUTOLITE INDIA LIMITED, MAHIPAL GUPTA, GOPAL MATHUR, R.K. MATHUR VERSUS VS. CCE, ALWAR 2018 (3) TMI 766 - CESTAT NEW DELHI , where it was held that the charge of clandestine clearance cannot be upheld only on the basis of the seized private record especially in view of the fact that the statements admitting clandestine clearance of such goods stand retracted. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Alleged clandestine manufacturing and clearance of Hellogen Bulbs without payment of duty.

Analysis:
The issue in this appeal revolved around the alleged clandestine manufacturing and clearance of Hellogen Bulbs without payment of duty by the appellant company's Unit-II. The case stemmed from a follow-up action taken by the department against Unit-I, a 100% EOU, for duty evasion, which led to allegations against Unit-II for clearing halogen bulbs clandestinely under the cover of a parallel invoice without recording the transaction in their books of account. The show cause notice proposed a demand of central excise duty on the halogen bulbs manufactured and cleared clandestinely from halogen capsules received from Unit-I. The Joint Commissioner confirmed the demand of central excise duty along with interest and imposed penalties on various individuals associated with the appellant unit.

In response, the appellant denied the allegations and filed an appeal before the Commissioner (Appeals), who upheld the decision based on the evidence of clandestine removal of excisable goods supported by the preparation of a note book by an employee of the appellant unit. However, the appellant highlighted a previous judgment by a Coordinate Bench of the Tribunal in a related case, where the charge of undervaluation and clandestine clearance was set aside due to lack of substantial evidence and valid reasons for rejecting the transaction value.

The Tribunal, after considering the arguments, found that the very basis for the alleged manufacture and removal of goods no longer existed, as per the findings of the Coordinate Bench in the appellant's related case. Therefore, the appeals were allowed, and the impugned order was set aside, granting the appellant consequential benefits in accordance with the law.

In conclusion, the judgment addressed the issue of alleged clandestine manufacturing and clearance of Hellogen Bulbs without payment of duty by the appellant company's Unit-II. The decision was based on the lack of substantial evidence to support the allegations, especially considering the findings of a Coordinate Bench in a related case, which led to the appeals being allowed and the impugned order being set aside.