2015 (10) TMI 899 - AT - Central Excise

Waiver of pre deposit - Clandestine manufacture and clearance of goods - Penalty u/s 11AC - Held that - The case of the appellant for stay was mainly based on the ground that quantum of clandestine clearances and duty calculation is not correct as the statements of the directors were duly retracted at the earliest possible occasion. Learned A.R. on the other hand made the bench go through para-10 of the Order-in-Original dated-16/09/2013 to argue that duplication in duty calculation was found to the extent of only ₹ 8.40 Lakh. It is observed that Adjudicating Authority has given detailed reasonings for confirmation of the clandestine activities and duty. Prima facie, appellant has not made out a case for complete waive of the confirmed dues. - partial stay granted.

Summary

Issues:
1. Confirmation of demand against the main appellant for clandestine manufacture & clearance of products.
2. Imposition of penalty on directors of the main appellant.
3. Arguments regarding duplication of duty calculation.
4. Stay application for waiver of confirmed dues.

Issue 1:
The Order-in-Original dated 16/09/2013 confirmed a demand of Rs. 7,71,66,154 against the main appellant for clandestine manufacture and clearance of iron re-rolled products. Additionally, an equivalent penalty was imposed under Section 11AC of the Central Excise Act, 1944. The directors of the main appellant were also penalized for their involvement in the activities.

Issue 2:
The directors argued that the case of clandestine manufacture was based on materials recovered during a search operation, and initial confessional statements were retracted. They contended that certain entries were duplicated in the duty calculation, leading to an erroneous demand. However, the revenue authority maintained that there was no duplication in demands, and the duty calculation was accurate after adjustments were made for abated quantities in statutory records.

Issue 3:
During the hearing of the stay application, the appellant claimed that the quantum of clandestine clearances and duty calculation were incorrect due to retracted statements. The revenue authority, on the other hand, pointed out that only a minor duplication of Rs. 8.40 lakh was identified in the duty calculation, which was adjusted by the Adjudicating Authority.

Issue 4:
After considering the arguments from both sides and reviewing the case records, the Tribunal observed that the Adjudicating Authority had provided detailed reasoning for confirming the clandestine activities and duty. While the appellant failed to establish a complete waiver of the confirmed dues, they were directed to pre-deposit Rs. 35.00 lakhs within 8 weeks, in addition to the Rs. 10 lakhs already paid. A stay on the recovery of the remaining amounts, interest, and penalties was granted pending the disposal of the appeals upon compliance with the pre-deposit requirement.