2012 (4) TMI 364 - AT - Central Excise

Stay Petitions AO stated that the appellant company has cleared the duty paid raw materials from their factory premises clandestinely without utilizing it for manufacture of their final product Held that - out of the demand of approx. Rs.55.90 lakhs, the appellant has already deposited an amount of Rs.20.75 lakhs during the investigation - considering the amount deposited by the appellant as enough deposit waiver to pre-deposit of balance - AO arrived at the shortage of MS/SS coils has considered the shortages of stainless steel coils only - AO has not considered the quantity of 17,100 kgs of SS coils which was an issue in another litigation and has attained finality and hence that quantity should also be considered for deduction for arriving at the shortage of input and fixing liability on the appellant - remit the matter back to adjudicating authority to decide afresh.

Summary

Issues: Stay petitions for waiver of pre-deposit of duty, interest, and penalties confirmed on the appellant company and its employees.

In this judgment by the Appellate Tribunal CESTAT, Ahmedabad, the Stay Petitions were filed seeking a waiver of pre-deposit of duty confirmed, interest, and penalties on the appellant company and its employees. The adjudicating authority had confirmed the amounts and penalties due to the appellant company allegedly clearing duty-paid raw materials from their factory premises clandestinely without utilizing them for manufacturing their final product. The appellant had already deposited a portion of the demanded amount during the investigation. The appellant's counsel argued that the Department's case was based on a notional shortage of raw material and provided detailed documents and worksheets to support their case, which the adjudicating authority had allegedly not considered. Another issue raised was the confiscation of stainless steel coils found outside the premises, which had been addressed in a separate proceeding. The appellant argued that this quantity should also be considered for deduction from the alleged unaccounted clearances. The findings of the adjudicating authority were reiterated by the ld.SDR. After considering the submissions, the Tribunal found that the appeals could be disposed of at that stage, waiving the pre-deposit condition based on the amount already deposited and decided to take up the appeals for disposal.

Upon reviewing the records and the Order-in-Original, the Tribunal noted discrepancies in the adjudicating authority's consideration of the shortages of MS/SS coils. The Show Cause Notice had alleged procurement and use of both types of coils for manufacturing activities, indicating inconsistencies in the shortage calculation. The appellant's reconciliation and explanations regarding both types of inputs needed verification from the documents collected from the Department. The Tribunal emphasized the need for the adjudicating authority to consider the quantity of 17,100 kgs of SS coils, which had been subject to a separate litigation and had attained finality, for deduction in determining the shortage of input and fixing liability on the appellant. Consequently, the Tribunal concluded that the impugned order should be set aside, and the appeal should be remanded back to the adjudicating authority for reconsideration following the principles of natural justice. Without expressing any opinion on the case's merits, the Tribunal allowed the appeals by way of remand, keeping all the issues open for further consideration.