2016 (11) TMI 576 - AT - Central Excise

Recovery u/s 11D - amount shown collected as central excise duty while availing SSI exemption - Held that - the appellants plea now is that these invoices are for stock transfer and they have not collected any duty from the buyers. No documentary/ supporting evidence to that effect has been produced before us. The appellant s own invoices indicate Central Excise duty separately. Accordingly, we find no merit in the appeal. Imposition of penalty - Held that - the original authority imposed penalty of ₹ 10,17,780/- which is equal to the Central Excise duty confirmed on both the grounds. On perusal of the order, we find no discussion or justification for imposing such penalty. Considering the facts and circumstances of the case, we find that the ends of justice will be met if the penalty is reduced to ₹ 2 lakhs. The recovery of excise duty from the appellants whether or not the SSI exemption is available to them is sustainable. We find no reason to interfere with the findings of the lower authority except for the modification of penalty as above. Appeal is partly allowed.

Summary

Issues:
1. Demand of Central Excise duty on grounds of non-remittance and undervaluation.
2. Claim of exemption under Notification No. 8/2002-CE.
3. Discrepancy in the collection of Central Excise duty.
4. Imposition of penalty without proper justification.

Analysis:
1. The appellant, engaged in manufacturing branded refined edible oil availing SSI exemption, faced demands for Central Excise duty due to non-remittance and undervaluation. The original authority and appellate authority upheld the demands. The appellant argued for exemption under Notification No. 8/2002-CE and disputed the valuation criteria, claiming the depot was not a place of removal. However, discrepancies were found in the appellant's tax liability arguments, leading to the rejection of their claims due to lack of evidence supporting their contentions.

2. Regarding the collection of Central Excise duty, it was noted that the appellant charged and indicated 8% duty on invoices, contradicting their claim for SSI exemption. The appellant's defense that these invoices were for stock transfer and no duty was collected from buyers lacked supporting evidence. The appellate tribunal found the appellant's stance inconsistent and upheld the duty demand, emphasizing the importance of documentary proof in such matters.

3. The imposition of a penalty equal to the Central Excise duty confirmed was deemed unjustified due to lack of discussion or justification in the original order. After reviewing the circumstances, the tribunal reduced the penalty amount, emphasizing the need for a proportional and justified penalty imposition in line with the case's specifics.

4. The tribunal upheld the findings of the lower authority regarding the recovery of excise duty from the appellant, affirming the sustainability of the decision irrespective of the SSI exemption availability. Apart from modifying the penalty amount, the tribunal found no grounds to interfere with the lower authority's conclusions, partially allowing the appeal while maintaining the duty recovery aspect.

This detailed analysis of the judgment highlights the key issues addressed, the arguments presented by the appellant, and the tribunal's reasoning behind the decisions rendered in the case.