2023 (5) TMI 7 - AT - Central Excise

Non-payment of Excise Duty - 1456 pcs. of other branded garments and 4963 pcs. of branded garments - appellants submitted that these branded goods were returned to them and were initially cleared under cover of duty paid invoices during the period 2011-12 2012-13, it is for these goods the benefit of exemption Notification No.31/2011-CE dated 24th March, 2011, was availed (on 1456 pcs.) - extended period of limitation - HELD THAT - The fact that no intimation as envisaged in the Notification No.31/2011-CE dated 24th March, 2011 has been furnished to the Department, coupled with the fact of anomalous sets of invoices, one bearing the rubber stamp indicating geographical and other details and the other set with no such rubber stamp (as was pointed out by the Learned A.R.) leaves much for consideration about the genuineness and acceptance of the said documents, submitted towards substantial compliance of their case. It is evidently clear that for availing benefit of an exemption notification, its stipulated condition must necessarily be observed. However, in the present case not even the primary requirement of intimation to the jurisdictional authority is met with - The Hon ble Apex Court in the case of EAGLE FLASK INDUSTRIES LIMITED VERSUS COMMISSIONER OF C. EX., PUNE 2004 (9) TMI 102 - SUPREME COURT , has categorically held that fulfillment of a notification conditions, set out for availment of exemption benefits are not empty formalities and merely procedural with no consequence attached for non-observance. Thus attendant conditions filing of declaration/undertaking/intimation are in the nature of action where failure to do so could lead to attendant consequences. The obvious consequence being the denial of the benefit in the present case. In the present case, the appellant was legally obliged to tender the requisite intimation in order to claim the exemption. Further, this failure is not once but with each time the goods were returned and under consideration in the present appeal. The benefit of exemption Notification No.31/2011-CE dated 24.03.2011 therefore, in respect of 1456 pcs is not admissible to the appellants. The benefit of duty paid nature of goods and the consideration of the said stock of 1456 Pcs. of branded good as out of duty paid stocks, cannot therefore be considered in favour of the appellants. 4963 pcs. of branded pants not found to be reflected in the ER I statement for July 2012 - clandestine clearance or not - HELD THAT - While certified copies of ER-I for the months of April 2012, May 2012 June 2012 have been appended as a part of the appeal paper book copies/transcripts of ER-I filed online for subsequent months are not on record. Instead the appellants have appended their private records and statement culled out for the period 1.4.12 to 31.3.13 in respect of the said goods which gives the date-wise periodical opening closing balance of the product in addition to certain other details as may have been maintained by them for their cross-reference and business purposes. I am afraid quantities of the product indicated therein cannot conclusively establish their case of holding on to the impugned 4963 Pcs. of branded pants. Extended period of limitation - no mens rea existing? - HELD THAT - To seek shelter under the plea of demand working, being an extension of documents tendered during audit is not only preposterous and abominable but also completely unethical, uncalled for unwarranted. The same being without a semblance of a legal justification deserves no merit. For the availment of benefit of Notification No. 31/11 CE Dated 24.03.2011, one of the principle requirement is the submission of the requisite intimation for which even a rigid time frame of 48 hours is provided in the notification itself and which admittedly has not been done at all and on occasions more than one. Also the misrepresentation in the monthly ERI record certainly is a case for rightful invocation of the suppression clause. No benefit accrues to the assessee, even though such detections are an outcome of the documents supplied/retrieved from the appellants themselves during the course of audit. The plea of the appellants on limitation therefore, fails completely and cannot be entertained. No benefit is accruable to them on this ground. Appeal dismissed.

Summary

Issues:
Violation of Central Excise Act and Rules, demand of Central Excise duty, non-payment of appropriate duty, contravention of Rule 11 (2) of the Central Excise Rules, 2002, demand for interest under Section 11AA of the Central Excise Act, 1944, failure to report goods in ER-1 statement, presumption of clandestine clearance, plea of limitation.

Violation of Central Excise Act and Rules:
M/s S.S. Fashion faced show-cause notice for violating Central Excise provisions, demanding duty on branded garments cleared. The Revenue alleged clearance without payment of duty, leading to penalties under Central Excise Rules.

Non-payment of Duty on Branded Garments:
Regarding 1456 pcs. of branded garments, the appellants claimed exemption under Notification No.31/2011-CE. However, failure to provide intimation to authorities as mandated in the notification led to denial of exemption benefits. The Tribunal emphasized the importance of fulfilling notification conditions for availing exemptions.

Failure to Report Goods in ER-1 Statement:
Concerning 4963 pcs. of branded pants missing in the ER-1 statement, the appellants attributed it to online filing issues. The Tribunal noted discrepancies in reporting stock quantities and rejected leniency plea based on outdated circulars, emphasizing the need for accurate reporting.

Plea of Limitation:
The appellants argued against the extended period for suppression charges, citing demands based on their records during audit. However, the Tribunal dismissed the plea, highlighting the appellants' failure to meet statutory requirements and the inaccuracy in their monthly return records.

Conclusion:
The appeal was dismissed due to lack of merit, with the Tribunal emphasizing the importance of compliance with statutory requirements and accurate reporting to avail exemptions and benefits under Central Excise laws.