2022 (10) TMI 794 - AT - Central Excise

Short payment of Central Excise Duty - SCN issued alleging that the appellant is manufacturer of auto parts, which are dutiable have charged and collected tax from their customer but did not pay to the Government - HELD THAT - Both the parties are registered with the Central Excise Department and both are located at Rudrapur, thus, under the jurisdiction of the same Central Excise authority. Further, it is found that appellant have led sufficient evidence before this Tribunal, which needs to be verified for the ends of justice. Accordingly, the appeal is allowed by way of remand to the original Adjudicating Authority with direction to hear the appellant and verify the records, and if required, also verify the records of the buyer and thereafter pass reasoned order in accordance with law.

Summary

Issues involved:
- Whether duty and penalty rightly demanded for alleged tax short paid or not paid on clearance of goods.

Analysis:
1. The issue in this appeal revolves around the demand of duty amounting to Rs.1,97,419/- along with an equal penalty under Section 11AC of the Act. The appellant, a manufacturer of auto parts, was alleged to have charged and collected tax from customers but failed to remit it to the Government, contravening the provisions of the Central Excise Act and Rules.

2. The show cause notice dated 02.05.2019 detailed the duty short paid or not paid, specifying the period, goods cleared, transaction values, tariff headings, applicable duty rates, and the total amount payable. The appellant, during adjudication proceedings, did not file a reply but sought adjournments, leading to an ex-parte order confirming the proposed demand and penalty.

3. The Commissioner (Appeals) upheld the order-in-original, noting that the appellant failed to inform the Department about goods being returned as defective, subsequently repaired, and redelivered to the buyer under GST payment. The goods were initially dispatched during the Central Excise regime but returned before 30.06.2017 due to defects, as confirmed by a certificate from the buyer.

4. The appellant's counsel highlighted the sequence of events, including the return of defective goods, rectification, and subsequent delivery under GST invoices, which were accepted and paid for by the buyer. The appellant requested a remand for a thorough verification of the facts.

5. After considering the contentions, the Tribunal found both parties registered with the Central Excise Department in Rudrapur under the same jurisdiction. The Tribunal acknowledged the evidence presented by the appellant, necessitating verification for justice. Consequently, the appeal was allowed by remand to the original Adjudicating Authority for a detailed review and reasoned decision in accordance with the law.

6. The appellant was directed to appear before the Adjudicating Authority within sixty days from receiving the order copy, cooperate in the proceedings, and seek a hearing opportunity. The decision to remand the case kept all issues open for further examination and resolution, ensuring a fair and thorough review of the matter.