2021 (12) TMI 71 - AT - Central Excise

Clandestine removal - IMT Bars - Area based exemption - contravention of re-credit facility available as per N/N. 39/2001- CE date 31.07.2001 - suppression of fact in making clandestine removal or not - time limitation - HELD THAT - is an undisputed fact that the appellant at the time of clearance of the goods under area based exemption Notification No- 39/2001- CE dated 31.07.2001 has not paid the duty. Moreover, the clearance of goods was made under the guise of that waste coal and accordingly goods were clandestinely cleared and evaded the payment of excise duty. Though the appellant subsequently paid duty but at time of clearance they have mis-declared and cleared the goods clandestinely. Therefore, the appellant has clearly contravened the condition stipulated under the Notification No. 39/2001- CE. Therefore the re credit of the duty paid subsequently is not admissible to the appellant. The appellants plea that there is no suppression of fact in the present case is of no help to them - there is clear contravention with malafide intention of Notification No 39/2001-CE. Therefore the appellant is not entitled for re- credit of the amount of duty paid in respect of goods clandestinely removed. Appeal dismissed.

Summary

Issues:
- Allegation of clandestine removal of goods
- Time limitation under section 11A of Central Excise Act, 1944
- Admissibility of re-credit of duty paid on clandestine removal
- Suppression of fact and fraud allegations
- Settlement under SVLDR Scheme

Analysis:

1. Allegation of Clandestine Removal of Goods:
The case involved the appellant, engaged in manufacturing excisable goods, clearing finished goods without paying Central Excise duty under the guise of waste coal, thereby evading duty payment. The appellant admitted to this during investigation and made the necessary payment. The issue was whether the clearance of goods under the area-based exemption notification constituted clandestine removal, leading to the denial of re-credit of the duty paid subsequently.

2. Time Limitation under Section 11A:
The appellant argued that the show cause notice was time-barred as they had been filing ER-1 returns. However, the Additional Commissioner's findings on the time limit were contradictory, creating confusion regarding the applicability of the time limitation under section 11A of the Central Excise Act, 1944 to units operating under separate schemes like the Area Based Exemption Benefit Scheme.

3. Admissibility of Re-Credit of Duty Paid on Clandestine Removal:
The appellant contended that the re-credit of duty paid on the clandestine removal should be allowed, as it was a case of oversight mistake in invoice preparation rather than intentional evasion. However, the tribunal found that the appellant had contravened the conditions of the exemption notification by misdeclaring and clandestinely clearing the goods, making them ineligible for re-credit.

4. Suppression of Fact and Fraud Allegations:
The revenue authority alleged suppression of fact and fraud in the clearance of goods without paying duty. Despite the appellant's denial of intentional evasion, the tribunal upheld the findings that there was a clear contravention with malafide intention, leading to the denial of re-credit.

5. Settlement under SVLDR Scheme:
The appellant's case was settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, but the suppression of fact and fraud allegations had attained finality in previous orders. Therefore, the tribunal concluded that the appellant was not entitled to re-credit of the duty paid on the goods clandestinely removed, upholding the impugned order and dismissing the appeal.

This detailed analysis covers the key issues raised in the legal judgment delivered by the Appellate Tribunal CESTAT AHMEDABAD in 2021.