2017 (12) TMI 1154 - AT - Central Excise

Clandestine manufacture and removal - revenue neutrality - Held that - the Tribunal had upheld the charges of removal of goods but remanded only on limited aspect of reworking of demand and the above findings of the Tribunal was not challenged before higher forum by the assessee. Thus the demand on merits cannot be challenged now as the Tribunal s findings has become final and only reworking of demand can be looked into. The re-quantification of demand cannot be undertaken at this stage since it involves the detail inspection of the records and documents. Further the modvat aspect for the purpose of quantification has also to be looked into. We thus find it appropriate to remand the case back to the adjudication authority for limited purpose of quantification. Appeal allowed by way of remand.

Summary

Issues:
Cross appeals filed against confirmation of demand/penalties, appeal against dropping of demand, appeal for enhancing penalty, issues related to unaccounted production and clearance of goods, undervaluation of goods, imposition of penalties, remand for reworking of demand, challenge on revenue neutrality, overlapping demands, reworking of duty demand, and quantification of demand.

Analysis:
The case involved cross-appeals filed by M/s Vidyut Metallics Pvt. Ltd. and individuals against the confirmation of demand and penalties, as well as an appeal by the revenue for dropping of demand and enhancing penalties. The dispute arose from alleged unaccounted production and clearance of Cold Rolled Stainless Steel Strips (CRSS) leading to duty evasion. The Tribunal initially confirmed some demands but remanded the case for reworking demand due to an overlap in demands. The adjudicating authority later confirmed reduced demands and penalties, dropping the undervaluation charge. The revenue challenged the reduction of demands and penalties based on overlapping demands and incorrect assessable values.

The appellant contended that there was no clandestine removal due to revenue neutrality from transferring goods to associate concerns with full duty payment and modvat credit. They argued against discrepancies in production records and invoices, citing the lack of motive for clandestine removal. The appellant also relied on a Supreme Court case to support their stance and provided quantification of clearances to refute the allegations.

The revenue argued that the demands were correct, emphasizing the non-consideration of certain invoices in reworking the duty demand. They highlighted discrepancies in assessable values for specific periods and products, asserting the sustainability of demands dropped by the adjudicating authority. They criticized the lack of new evidence from the appellant to support reworking demands and quantification.

The Tribunal analyzed the submissions and upheld the charges of removal of goods but remanded the case for reworking the demand due to an overlap. The Tribunal emphasized the need for quantification and remanded the case to the adjudicating authority for a detailed inspection of records and documents. The Tribunal refrained from expressing views on quantification, instructing both parties to submit relevant papers for reevaluation. Consequently, all appeals were disposed of by remanding the case for further quantification by the adjudicating authority.

In conclusion, the judgment addressed various issues related to unaccounted production, duty evasion, penalties, overlapping demands, and quantification, providing detailed analysis and remanding the case for further assessment by the adjudicating authority.