2024 (8) TMI 89 - HC - Central Excise

Clandestine removal - shortage of goods - Whether the Tribunal is correct in holding that duty on 17943 kgs. of billets seized on 27.3.1999 is payable though the evidence recording quantity of goods and consumption thereof as well as s clearance of final product on payment of duty was available and placed on record? - HELD THAT - In view of the concurrent findings of fact recorded by the Tribunal in respect of the 17,943 kgs of billets seized on 27.03.1999 by the respondent Department, it is not in dispute that the said billets were utilized by the appellant assessee without permission from the Competent Officer and could not have been produced at the time of inspection carried out on 04.07.2000. The CESTAT was therefore justified in holding that as per the material available on record and in absence of any evidence produced by the appellant to show that such final products manufactured by them out of the seized billets was recorded in RG-1 Register for the same was cleared under the cover of Central Excise, on payment of duty, the CESTAT was justified in confirming the demand, so far as the 17,943 kgs of billets found which were supposed to be kept in the custody of the appellant at the relevant time. With regard to the contention raised by the appellant that the CESTAT has committed an error by not adopting the same reasonings which were given for granting relief in respect of 9247.5 kg of billets which were alleged to have been found shortage on the ground as recorded in para no.7 of the Impugned Order passed by the CESTAT, it is not tenable in view of the fact that the CESTAT has distinguished shortage of 17,943 kg of billets on the ground that the same was seized on 27.03.1999 whereas the shortage of alleged 92475 kg of billets was set aside only because in view of the finding arrived at by the CESTAT that there was no actual shortage of billets and that same was only pseudo and there was no evidence on record produced by the revenue to show that the billets are being used in the manufacture of final products clandestine. The question of law is answered against the assessee and in favour of the revenue as there is no infirmity in the impugned order passed by the Tribunal - Appeal dismissed.

Summary

Issues:
1. Appeal against order passed by Custom Excise and Service Tax Tribunal.
2. Confirmation of excise duty on seized billets.
3. Adjudication of excise duty, interest, and penalty.
4. Appeal before Commissioner of Central Excise Appeals and CESTAT.
5. Contradictory findings by CESTAT on quantity of seized billets.
6. Utilization of seized billets without permission.
7. Confirmation of excise duty by CESTAT.
8. Failure to produce evidence of final product manufacturing.
9. Setting aside the order of seizure by Commissioner of Appeals.
10. Distinguishing shortage of billets by CESTAT.

Analysis:

The High Court of Gujarat heard an appeal against an order passed by the Custom Excise and Service Tax Tribunal, where the appellant challenged the confirmation of excise duty on seized billets. The case involved a shortage of billets in the factory premises during an inspection, leading to a show-cause notice for recovery of excise duty, interest, and penalty. The appeal process included submissions before the Commissioner of Central Excise Appeals and the CESTAT, which partly allowed the appeal but confirmed duty and penalty on a specific quantity of seized billets.

The appellant argued that subsequent actions should have nullified the duty on the seized billets, emphasizing contradictory findings by the CESTAT on different quantities of seized billets. The appellant contended that duty should apply to the billets, not the final products manufactured. However, the Senior Standing Counsel supported the CESTAT's decision, stating that the appellant admitted unauthorized utilization of the seized billets, justifying the duty imposition.

The High Court upheld the CESTAT's decision, noting the appellant's failure to provide evidence of final product manufacturing from the seized billets. The court dismissed the appeal, emphasizing the concurrent factual findings of the authorities and rejecting the appellant's arguments regarding subsequent orders and alleged errors by the CESTAT. The judgment favored the revenue, confirming the duty on the seized billets due to lack of evidence supporting the appellant's claims.