2014 (6) TMI 416 - AT - Central Excise

Waiver of pre deposit - penalty under Rule 173Q - Discrepancy in RG-1 register - Held that - The Applicant since beginning in their reply to the demand Notice have been claiming that the difference in the figures, has been due to clearance of goods for captive consumption. I also find that in the balance sheet against the said production figures, it has been mentioned by way of insertion of notes that the said figures also include captive consumption, sample issues and sub-contracted items. No other corroborative evidences have been produced by the department in support of their claim that the goods were cleared clandestinely. Thus, prima facie the Applicant could able to reconcile the differences between the production figures shown in the RG-1 and in their balance sheet. In these circumstances, the Applicant could able to make out a prima facie case for total waiver of pre-deposit of dues adjudged - Stay granted.

Summary

Issues: Application seeking waiver of pre-deposit of duty and penalty under Rule 173Q of Central Excise Rules, 1994.

Analysis:
1. The Applicant, a Public Sector Undertaking, sought waiver of pre-deposit of duty and penalty amounting to Rs. 10.87 Lakhs under Rule 173Q of Central Excise Rules, 1994. The demand was based on alleged removal of goods without payment of duty, as per the differential quantity between production figures in the balance sheet and RG-1 Register.

2. The ld. Sr. Advocate for the Applicant argued that the figures in the balance sheet included clearances for captive consumption and manufacturing, which were subsequently cleared after payment of excise duty. The adjudicating authority initially dropped the proceedings, but the ld. Commissioner (Appeals) overturned this decision and upheld the demand.

3. The ld. AR for the Revenue supported the findings of the ld. Commissioner (Appeals) regarding the demand against the Applicant.

4. Upon reviewing the records, the Member (J) observed that the demand was solely based on the difference in production figures between RG-1 and the balance sheet. The Applicant consistently maintained that this difference was due to clearances for captive consumption, supported by notes in the balance sheet. No additional evidence was provided by the department to prove clandestine clearance of goods. Consequently, the Applicant was able to establish a prima facie case for total waiver of pre-deposit of dues adjudged. Therefore, all dues were waived, and recovery stayed pending the Appeal. The Stay Petition was allowed.

This judgment highlights the importance of providing sufficient evidence to support claims in excise duty matters and the significance of reconciling discrepancies between production figures to establish a prima facie case for waiver of pre-deposit of duties and penalties.