2016 (11) TMI 266 - AT - Central Excise

Clandestine removal - Demand - Penalty - Held that - In this case the sole allegation against the appellants is that they have received the inputs clandestinely manufactured by M/s Nabha Steels Ltd. and M/s Pushpanjali Steel Alloys Pvt. Ltd. - In the case of M/s Nabha Steels Ltd. and M/s Pushpanjali Steel Alloys Pvt. Ltd., this tribunal has already held that they were not involved in the activity of clandestinely removal of the goods to the appellants - As inputs have not been received by the appellants therefore, the question of manufacturing does not arise - Decided in favor of the assessee.

Summary

Issues: Allegation of clandestine removal of goods, duty demand, imposition of penalty

In this case, the appellants challenged the impugned order based on the allegation of clandestine removal of goods. The investigation revealed certain cash entries in private records of M/s Nabha Steels Ltd. and M/s Pushpanjali Steel Alloys Pvt. Ltd., implicating the appellants in procuring inputs without issuing duty payment invoices. Show cause notices were issued demanding duty, interest, and penalties. The appellants contended that the demands were unfounded as the tribunal had previously exonerated M/s Nabha Steels Ltd. and M/s Pushpanjali Steel Alloys Pvt. Ltd. from similar allegations. The advocate argued that since the inputs were not received clandestinely, the duty imposition was unjustified. On the contrary, the respondent argued that the appellants had admitted to receiving inputs clandestinely, leading to the production of final goods cleared without duty payment. However, the tribunal found that as the inputs were not received clandestinely by the appellants, the duty demand was unsustainable. Therefore, the impugned orders were set aside, and the appeals were allowed with consequential relief.