2019 (7) TMI 732 - AT - Central Excise

Clandestine removal - allegation of wrong availment of area based exemption - allegation that goods shown to have been manufactured and cleared from Rookee unit, so as to avail the benefit of area based exemption whereas in fact manufactured and cleared from their Ghaziabad unit - allegation based upon the investigations made at the Roorkee Units and the statements of the Managing Director and four employees of Roorkee Unit - different product manufactured by the units - HELD THAT - The entire case of the Revenue is based upon the scrutiny of the documents at Roorkee . Apart from the statement of the four employees of the Roorkee unit and the Managing Director, there is no further evidence produced by the Revenue in the shape of statements of transporters of the goods or the identification of the buyers. There was also no shortage of raw materials at Roorkee unit, thus indicating that the documents maintained at Roorkee unit were perfect - Wherever the GR numbers are not reflected in the invoices, Managing Director has indicated in his statement that in those case the customers themselves have taken the delivery at the factory gate of Roorkee unit and arranged transport. The Revenue has not bothered to make enquiries from the customers to verify the truth of the said statement of the Managing Director. Appellants have shown documentary proof in the form of GRs showing dispatch to Rishi Kesh, Chandigarh and Pathankot. Revenue has not made any efforts to counter-check this factual aspects either from the transporters or from D.G. Border Roads Organisation. They have placed two affidavits to that effect before the adjudicating authority which do not stand considered by the adjudicating authority - Apart from that the appellants have also produced confirmatory letters from various customers to the effect that they received the goods only from Roorkee unit. The adjudicating authority has not bothered to examine the said customers and has simplicitor discarded the said evidence. It is well settled law that the findings of clandestine removal are required to be established on the basis of positive and sufficient evidences. As already observed, in the present case the demand is being confirmed against Ghaziabad unit, without producing any evidence against the said manufacturing unit. There is not even an iota of evidence indicating that the clearances stand effected from the said unit. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Duty demand, interest, penalty, and confiscation of goods against M/s. AKona Engg. Pvt. Ltd.
2. Allegations of clandestine removal and duty evasion.
3. Discrepancies in stock records and clearances between Ghaziabad and Roorkee units.
4. Evidence presented by the Revenue and appellants.
5. Validity of statements and documentary evidence.
6. Findings and penalties imposed by the adjudicating authority.
7. Appeal against duty demand and penalties.

Analysis:

1. The appeals in this case were disposed of by a common order concerning the demand of duty, interest, penalty, and confiscation of goods against M/s. AKona Engg. Pvt. Ltd. The lower authorities confirmed a duty demand of &8377; 42,56,777 along with interest and penalties. Additionally, excisable goods valued at &8377; 4.35 crores were confiscated with a redemption fine option. Penalties were also imposed on the company and its Managing Director.

2. M/s. AKona Engg. Pvt. Ltd., located in Ghaziabad and Roorkee, was accused of not paying excise duty on clearances from their Ghaziabad unit while availing SSI exemption and area-based exemption for their Roorkee unit. The Directorate General of Central Excise Intelligence (DGCEI) seized records and conducted investigations, alleging clandestine removal of goods.

3. Discrepancies in stock records and clearances between the Ghaziabad and Roorkee units formed the basis of the allegations. The Revenue alleged that goods shown as manufactured and cleared from the Roorkee unit were actually done at the Ghaziabad unit to exploit exemptions. However, no discrepancies were found at the Ghaziabad unit during searches.

4. The Revenue's case relied heavily on documents and statements from the Roorkee unit, without substantial evidence from the Ghaziabad unit. The appellants presented evidence such as transport details, customer confirmations, and GRs to support their claim of legitimate clearances from the Roorkee unit.

5. The validity of statements made by the Managing Director and documentary evidence was contested. The appellants argued that statements were coerced, and documentary evidence supported legitimate clearances from the Roorkee unit, which the Revenue failed to counter-check adequately.

6. The adjudicating authority confirmed duty demands, penalties, and confiscation, which were upheld by the Appellate Commissioner except for the redemption fine. The duty demand and penalties were challenged in the present appeal.

7. The Tribunal found insufficient evidence to support the allegations of clandestine removal against the Ghaziabad unit. Lack of evidence linking clearances to the Ghaziabad unit led to the impugned order being set aside, and all appeals were allowed.

This detailed analysis covers the issues, evidence, findings, and the ultimate decision of the Tribunal in the legal judgment.