2016 (12) TMI 595 - AT - Central Excise

Evasion of duty - confiscation of goods - dummy unit - SSI Exemption - Held that - the factual position has been examined in detail in the impugned order before arriving at the conclusion. The Commissioner (Appeals) also observes that the Department has not carried out any investigation to get supportive evidence on the allegation that M/s Gulshan Metal Works was a non-existing dummy firm without manufacturing facility. He relied upon the documentary evidence submitted by M/s Gulshan Metal Works to support their independent existence and also of the manufacturing activity. The impugned order elaborately dealt with the same - confiscation lacks merit - appeal dismissed - decided against Revenue.

Summary

Issues:
- Maintainability of appeals filed by Revenue without proper authorization
- Allegations of clandestine removal and duty liability attribution
- Lack of evidence and arbitrary valuation of seized goods
- Existence and manufacturing activity of M/s Gulshan Metal Works

Analysis:
1. Maintainability of Appeals: The Commissioner (Appeals) set aside the confiscation of seized goods for two manufacturers, stating they were not required to pay duty as their individual clearance value did not exceed the limit. The Revenue filed appeals against this order. The respondents raised a preliminary objection on the maintainability of the appeals due to lack of proper authorization by the Committee of Commissioners. The Revenue argued that the Commissioner, Delhi - I, acting for both Commissioners, authorized the appeals. The Tribunal reviewed the appeal papers and found the objection unsustainable, allowing the examination of the appeals on their merits.

2. Clandestine Removal Allegations: The Revenue contended that there was no demarcation between the premises of two concerns, implying clandestine removal. They alleged that the clandestine removal was known only to the main person behind the family concerns. However, the Tribunal noted that the grounds of appeal did not provide substantial evidence to challenge the lower authority's findings. Previous Tribunal decisions highlighted the lack of effort by Revenue to establish the manufacturing of excisable goods or quantify demands accurately based on seized goods with a specific brand name.

3. Lack of Evidence and Arbitrary Valuation: The Tribunal observed that the Revenue failed to provide concrete evidence or legal propositions to dispute the lower authority's findings. The valuation of goods was considered arbitrary, with no attempt made to determine the actual transaction value. The Commissioner (Appeals) noted the absence of investigative efforts by the Department to gather supportive evidence regarding the existence and manufacturing activities of M/s Gulshan Metal Works, relying on documentary evidence submitted by the firm to support its independent existence.

4. Existence and Manufacturing Activity: The Tribunal upheld the impugned order, emphasizing that no valid reasons existed to interfere with it. The Commissioner (Appeals) extensively analyzed the factual position and documentary evidence before concluding that the Department lacked substantial investigation to support allegations against M/s Gulshan Metal Works. Ultimately, the Tribunal dismissed the appeals filed by the Revenue, affirming the impugned order.