2017 (10) TMI 74 - AT - Central Excise

Clandestine removal - demand of duty of Central Excise amounting to ₹ 9,80,772/- is based mainly on the fact that the goods were cleared under six fake/parallel invoices - Held that - The appellant has not been able to give any evidence to counter the facts given in the impugned order - demand upheld. Clandestine manufacture and removal - demand of ₹ 19,96,320/- with interest on account of finished goods manufactured by using raw material received by the appellant and which were not accounted for in their records - Held that - there is no evidence on record positively to indicate that the appellant manufactured finished goods out of the raw material and sold it clandestinely - appellant pleads that they have not been given opportunity for cross-examination of the persons whose statements were relied upon in this regard by the department - matter is remanded to original adjudicating authority for fresh decision after giving opportunity to the appellant for cross-examination - matter on remand. Appeal allowed in part by way of remand.

Summary

Issues:
1. Appeal against Order-in-Appeal sustaining Central Excise duty and penalty.
2. Allegations of clearing goods based on fake/parallel invoices.
3. Demand of Central Excise duty on goods manufactured from unaccounted raw material.
4. Opportunity for cross-examination of witnesses in the case.

Analysis:
1. The appellant, M/s Indo Alusys Industries Ltd., appealed against the Order-in-Appeal sustaining Central Excise duty of ?29,77,154/- along with equivalent penalty. The Tribunal noted the long pendency of the appeal and proceeded to decide the matter on merits based on available facts and evidence.

2. The Revenue side reiterated that the appellant cleared goods using fake/parallel invoices and failed to account for the manufacturing of finished goods from raw material received. The Department argued that duty of Central Excise was rightfully demanded on the goods manufactured from unaccounted raw material.

3. After considering submissions from both sides, the Tribunal observed that the demand of Central Excise duty amounting to ?9,80,772/- was primarily based on the clearance of goods under fake/parallel invoices. The Tribunal found no defense from the appellant in this regard, and the impugned order detailed admissions by various individuals involved in the issuance and transportation of the goods under question. The Tribunal upheld the demand of ?9,80,772/- as the appellant failed to counter the facts presented.

4. Regarding the demand of ?19,96,320/- along with interest, related to finished goods manufactured from unaccounted raw material, the appellant argued for an opportunity to cross-examine the persons whose statements were relied upon by the Department. The Tribunal found insufficient evidence to conclusively prove the manufacturing and sale of finished goods clandestinely. As a result, the Tribunal set aside the demand of ?19,96,320/- and remanded the matter to the original adjudicating authority for a fresh decision after providing the appellant with an opportunity for cross-examination and a personal hearing.

5. In conclusion, the impugned order was modified to reflect the above decisions, partially allowing the appeal in the stated terms. The Tribunal emphasized the need for a fair adjudication process, including the opportunity for cross-examination and personal hearing, in matters involving significant duty demands and allegations of malpractice.