2018 (11) TMI 970 - AT - Central Excise

Clandestine manufacture and removal - it appeared to Revenue that appellant had suppressed manufacture and clearances of 4316.645 MT of MS bars and the same was not reflected in ER-1 return - time limitation - Held that - On the basis of data retrieved by Government Examiner of Questioned Documents from the electronic devices recovered, it is established that the appellant had indulged in suppression of quantity of MS bars manufactured by them therefore the contention of appellant that the show cause notice is time barred is not sustainable. The appellant has not strongly contested on the other aspects of manufacture such as consumption of raw material, consumption of electricity, transportation of goods and availability of customers to whom such goods were cleared, therefore the appellants have not made out any case to interfere with the impugned order - impugned order upheld - appeal dismissed - decided against appellant.

Summary

Issues:
- Time bar contention on show cause notice
- Allegations of suppression of quantity of MS bars manufactured
- Reliability of data retrieved from electronic devices
- Contestation on aspects of manufacture
- Imposition of penalties on directors

Analysis:
The judgment pertains to three appeals arising from a common Order-in-Original passed by the Commissioner, Customs, Central Excise & Service Tax, Hapur. The appellants were franchisees engaged in manufacturing MS bars and MS ingots under an agreement with M/s. Kamdhenu Ispat Ltd. The dispute arose when a search conducted by DGCEI revealed discrepancies in the quantity of MS bars dispatched by the appellants. The show cause notice alleged suppression of 4316.645 MT of MS bars and demanded Central Excise duty of ?2,26,72,715. The original authority confirmed the demand and imposed penalties on the directors. The appellants contested the notice on the grounds of time bar and reliability of the retrieved data.

The appellant's counsel argued that the alleged royalty payments lacked corroborative evidence and were disputed by employees during cross-examination. It was contended that discrepancies in the show cause notice figures rendered it unreliable and presumptive. On the other hand, the Revenue argued that the data retrieved from electronic devices conclusively proved the suppression of manufactured quantity. The original authority upheld the reliability of the retrieved data and rejected the appellant's contentions.

After considering the submissions and examining the record, the Tribunal found that the data retrieved established the suppression of MS bars by the appellants, undermining their time bar contention. The Tribunal noted the lack of contestation on various aspects of manufacture, leading to the dismissal of the appeals. The judgment upheld the impugned order, dismissing all three appeals. The penalties imposed on the directors were also affirmed. The decision was pronounced on 15.11.2018 by the Tribunal members, Mrs. Archana Wadhwa and Mr. Anil G. Shakkwar.