2018 (2) TMI 202 - AT - Central Excise

Clandestine removal - MS ingots - Held that - in case the duty liability in respect of these consignments, though undoubtedly removed clandestinely without discharging duty liability, such liability has been discharged during investigation stage itself by the buyers, it would be not just and fair to demand the very same amount again from the appellants - To verify this claim of the appellant, it would be proper, in our view, to remand the matter to the original authority only for the limited purpose of ascertaining the exact quantum that has been discharged by the buyers and which will then have the effect of reducing the net duty liability to be demanded from the appellant. CENVAT credit - receipts of MS scrap from M/s. Salem Automec, a dealer of BHEL - Held that - to benefit from the facility, appellant will necessarily have to produce the dealers invoice with proper endorsement from M/s. Salem Automec. This definitely has not been done. The appellants are falling back on the ledger account of the said Salem Automec, which by any stretch of imagination cannot take the place of the document evidencing payment of duty - credit not allowed. Sale of scrap as reflected in their balance sheet - Held that - it appears that the appellant did not produce any evidence in support of their claim before the lower appellate authority. However, before this forum, one more opportunity was sought to corroborate the contentions. In the interest of justice, we accept this plea - matter on remand. Appeal allowed by way of remand.

Summary

Issues: Alleged clandestine removal of MS ingots without payment of duty, demand of central excise duty, imposition of penalty under section 11AC, appeal against adjudication order.

Analysis:
1. Clandestine Removal of MS Ingots: The case involved the alleged clandestine removal of MS ingots by the appellants without payment of duty, partly under duplicate set of invoices and partly without any invoice. The department officers seized incriminating documents showing receipt of MS scrap and removal of MS ingots, leading to the confirmation of demand of central excise duty amounting to &8377;19,16,874/- along with interest and imposition of penalty under section 11AC. The Commissioner (Appeals) upheld this order, prompting the appeal.

2. Submission Regarding Duty Liability: The appellant's counsel argued that certain buyers of MS ingots had already paid central excise duty on the goods purchased from the appellants, and thus, demanding duty again for the same quantity was unjustified. The tribunal agreed to remand the matter to ascertain the exact duty amount already discharged by the buyers, potentially reducing the net duty liability on the appellants.

3. MS Scrap Receipt and CENVAT Credit: The appellants claimed that the MS scrap purchased from a dealer of BHEL had already suffered excise duty at the hands of BHEL, entitling them to CENVAT credit. However, the tribunal noted that proper documentation, such as dealer's invoice with endorsement, was lacking, leading to the dismissal of this plea.

4. Sale of Scrap Adjustment: The appellant sought an adjustment in the demand of MS ingots proportionate to the quantity of MS scrap sold by them, but failed to provide evidence before the lower appellate authority. The tribunal granted an opportunity for the appellant to substantiate their claim during denovo proceedings, directing the adjudicating authority to reevaluate this aspect.

5. Remand and Additional Proceedings: The tribunal set aside the impugned order and allowed the appeal by remanding the matter to the adjudicating authority for specific purposes, including verifying duty liability already discharged by buyers and reexamining the sale of scrap adjustment. The appellant was granted the opportunity to present additional documents, and all other issues, including penalty quantum, were left open for further consideration.