2014 (7) TMI 358 - AT - Central Excise

Duty demand - Clandestine removal of goods - Held that - Applicant had issued parallel invoices in relation to total clearances of 42,800 kgs.of tea, details of which are shown in the Annexure to the Notice. One of the Consignee mentioned in the said invoice has admitted to have received the goods from the Appellant. The Appellant could not furnish any reasonable explanation in stating the circumstances under which the excise invoices having same serial numbers were issued to other consignees. Similarly, sample of around 45,740 kgs. had been cleared without payment of duty. It is the plea of the Appellant that the samples were drawn from the duty paid stocks cleared and not separately removed without payment of duty. However, the Appellant could not produce any evidence to this effect. Similarly the clearances made from the factory as weighment slip involving quantity of 5,855 kgs. could not be properly justified by the Appellant. Therefore, the quantity of 42800kgs. involving duty of ₹ 55,640/- removed on parallel invoice, 5,855 kgs. involving duty of ₹ 7,612/- removed on weighment slips, and 45,740 kgs. involving duty of ₹ 59,462/-removed as samples, had been cleared without payment of duty, are liable to be confirmed against the Appellant. Consequently, the total duty confirmed against the Appellant is accordingly works out to ₹ 1,22,714/- (Rs.55,640 Rs.7,612/- Rs.59,462/-).The penalty imposed under Section 11AC is accordingly reduced to ₹ 1,22,714/- and interest under Section 11AB, as applicable. - Decided partly in favour of assessee.

Issues:
1. Allegation of clandestine manufacture and removal of tea without payment of duty.
2. Direction to make pre-deposit under Sec.35F of CEA,1944.
3. Appeal dismissal for non-compliance with pre-deposit.
4. Appeal before Tribunal leading to remand to Commissioner of Central Excise (Appeals).
5. Upholding of adjudicating authority's order by Commissioner (Appeals).
6. Appeal challenging confirmation of demand by Appellant.
7. Allegations of duplicate invoices, suppression of production, and maintenance of two sets of registers.
8. Arguments regarding lack of evidence and reliance on Tribunal judgments.
9. Revenue's contentions on parallel invoices, maintenance of registers, and excessive raw material consumption.
10. Tribunal's analysis of the impugned order and findings on duty evasion allegations.
11. Confirmation of duty evasion on certain clearances.
12. Reduction of penalty and interest under relevant sections.

Detailed Analysis:

1. The case revolves around the allegation of clandestine manufacture and removal of tea without duty payment. The Appellant challenged the order confirming duty evasion by the adjudicating authority, leading to an appeal before the Commissioner (Appeals) and subsequently to the Tribunal.

2. The Commissioner (Appeals) directed the Appellant to make a pre-deposit under Sec.35F of CEA,1944, which the Appellant failed to comply with, resulting in the dismissal of their appeal. However, the Tribunal later allowed the appeal and remanded the matter back to the Commissioner (Appeals) for a fresh decision.

3. The Appellant contested the confirmation of duty evasion, arguing against the allegations of duplicate invoices, suppression of production, and maintenance of two sets of registers. They emphasized the lack of concrete evidence and cited relevant Tribunal judgments to support their case.

4. On the contrary, the Revenue maintained that the Appellant issued parallel invoices, maintained two sets of registers to evade duty, and failed to explain discrepancies in raw material consumption. The Revenue argued for the confirmation of duty evasion based on these grounds.

5. The Tribunal analyzed the impugned order and found that while some allegations lacked substantial evidence, certain clearances, such as those involving parallel invoices and samples, were confirmed to have occurred without duty payment.

6. Consequently, the Tribunal modified the impugned order, confirming duty evasion on specific clearances and reducing the penalty and interest imposed on the Appellant under relevant sections.

7. In conclusion, the Tribunal partly allowed the appeal, granting relief to the Appellant as permissible under the law.

This comprehensive analysis covers the issues, arguments presented by both sides, the Tribunal's findings, and the final decision rendered in the judgment.

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