2018 (7) TMI 1776 - AT - Central Excise

Clandestine removal - shortage of raw material - M.S. Ingots - the earlier order of the Tribunal passed on the assessee s appeal confirming the demand but reducing the penalties was not placed before the Tribunal while allowing the Revenue s appeal by way of remand - Held that - If the said demand stands confirmed by the earlier order of the Tribunal it was not open to Commissioner (Appeals) to confirm the same again. In as much as the fate of the earlier order has not been placed on record it is deemed appropriate to set aside the impugned order and remand the matter to the Original Adjudicating Authority to find out the correct factual position and to re-decide the matter again - appeal allowed by way of remand.

Summary

Issues: Alleged shortages of final products and raw materials, confirmation of demands, penalties imposed, remand order by Tribunal, Commissioner (Appeals) decision, evidentiary analysis, remand to Original Adjudicating Authority.

Detailed Analysis:

1. Alleged shortages of final products and raw materials: The case involved an appellant engaged in manufacturing Bars & Ingots, who also purchased Ingots from the market for their final products. Following an interception of a truck carrying M.S. Bars, investigations revealed shortages in final products and raw materials at the appellant's premises, which the Revenue attributed to clandestine removal. Statements admitting the shortages were recorded from the Authorized Signatory.

2. Confirmation of demands and penalties imposed: Proceedings were initiated against the appellant, resulting in a Show Cause Notice confirming demands of duty for shortages of M.S. Bars, M.S. Ingots, and Silico Manganese. The Original Adjudicating Authority confirmed the demands and imposed penalties, which were later appealed before the Commissioner (Appeals) who confirmed the demands but reduced penalties.

3. Remand order by Tribunal and Commissioner (Appeals) decision: The Tribunal, in separate orders, confirmed demands, reduced penalties, and remanded the matter to the Commissioner (Appeals) for de-novo decision on the quantum of penalties. The Commissioner (Appeals) was instructed to analyze the evidence on record to determine the existence of clandestine removal before imposing penalties.

4. Evidentiary analysis and remand to Original Adjudicating Authority: The Commissioner (Appeals) passed an impugned order confirming demands and imposing 100% penalties without considering the previous Tribunal orders. Due to the lack of clarity on the fate of earlier orders and the need for a correct factual position, the impugned order was set aside, and the matter was remanded to the Original Adjudicating Authority for re-decision. The appellant was granted an opportunity to present their defense before the Commissioner (Appeals) in the subsequent proceedings.

This detailed analysis highlights the progression of the case from the alleged shortages to the imposition of penalties, the role of the Tribunal and Commissioner (Appeals) in confirming demands and reducing penalties, and the necessity for a thorough evidentiary analysis before imposing penalties. The remand to the Original Adjudicating Authority emphasizes the importance of establishing the correct factual position before making decisions in matters of duty demands and penalties.