2007 (1) TMI 274 - AT - Central Excise

Registration- Suspension of change in constitution without permission- Alleged that appellant used to fraud Central Excise authorities with a view to get inadmissible benefits Demand and Penalties confirmed- Suspension of Registration upheld.

Summary

Issues:
1. Transfer of Central Excise registration from one entity to another.
2. Allegations of clandestine removal of goods and non-payment of duty.
3. Suspension of registration and rejection of registration application.
4. Legal provisions regarding suspension of registration and consequences of non-compliance.

Issue 1: Transfer of Central Excise registration
The case involved the transfer of Central Excise registration from M/s. Karnataka Ginning & Pressing Factory (M/s. KGPF) to M/s. Karnataka Dyeing & Printing Mills Pvt. Ltd. (M/s KDPMPL). The issue arose when M/s. KGPF did not intimate the change in constitution to the jurisdictional Central Excise Officer within the stipulated period. The authorities found that M/s. KGPF and its partner were involved in clandestine removal of goods and other irregularities, leading to the suspension of their registration.

Issue 2: Allegations of clandestine removal and non-payment of duty
The authorities discovered cases of clandestine removal of goods against M/s. KGPF in 1991 and 1998, with pending duty amounts. Additionally, it was noted that M/s. KGPF had suppressed facts from the Central Excise authorities and disposed of detained goods without permission. Various duty demands were confirmed against M/s. KGPF, with penalties imposed. The non-payment of dues and involvement in irregular activities were key factors in the decision to suspend the registration.

Issue 3: Suspension of registration and rejection of application
Following the investigations and findings of irregularities, a show cause notice was issued proposing suspension of M/s. KGPF's registration and rejection of M/s. KDPMPL's registration application. The Asstt. Commissioner of Central Excise suspended M/s. KGPF's certificate until recovery of dues and rejected M/s. KDPMPL's application. The Commissioner (Appeals) upheld this decision, leading to the appeal before the Tribunal.

Issue 4: Legal provisions and consequences
The Tribunal analyzed the relevant legal provisions, including Rule 9 of the Central Excise Rules 2002 and Notification 35/2001. It was highlighted that the power of suspension of registration existed even prior to the issuance of Notification No. 35/2001. The Tribunal affirmed the authorities' actions in suspending M/s. KGPF's registration due to the confirmed duty demands and penalties. The Tribunal rejected the appeal, emphasizing that the challenge to confirming demands had been unsuccessful, and the suspension of registration was justified under the law.

In conclusion, the Tribunal upheld the impugned order, affirming the suspension of registration and rejection of the appeal based on the findings of irregularities and non-compliance with Central Excise regulations.