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2024 (3) TMI 636 - AT - Central ExciseDemand of duty based on discrepancy in Invoice towards quantity of goods cleared - Validity of Demands Based on Proforma Invoices - Duty on Goods Found in Factory Premises without declaring in RG-1 stock register - Levy of penalty under rule 209A of CER - assisting and abetting in evasion of duty by SIPL or not - benefit of SSI Exemption. Demand of Excise Duty of Rs 1,06,687.52 for the goods cleared as per Invoice No 16 18 dated 24.04.2001 - HELD THAT - The Central Excise Invoices referred to the description for which order was placed on the appellants giving the number of complete credenza/ storage cabinets supplied by the appellant. To ascertain the correctness of the claim no enquiries were conducted from HFCL in respect of the alleged discrepancies. Further the transaction/ Assessable Value for 44 pieces, as appearing in the RG-I Register is the same as appearing in the Central Excise Invoice No 16 and 18, both dated 20.04.2001. In view of the above revenue authorities have totally failed to adduce evidence to show that appellant had cleared 44 pieces against these invoices. The order for confirming the demand by taking 44 number as appearing in RG-1 register as complete credenza/ storage cabinets is contrary to the facts on record and no effort has been made to ascertain true facts by making any enquiry/ investigation at the customer end. There are no merits in this demand. Demand of Rs 90,720/- for the goods alleged to be cleared to Sita Resorts on the basis of the proforma invoices - HELD THAT - It is not placed on record through any tangible evidence to show that the goods were cleared against these proforma invoices. Even Shri Soni has in his statement stated so. Two more statements of Shri Soni were subsequently recorded and no question on these clearances was put to him. Appellant had asked for the cros s examination of Shri Soni which was also not allowed. Impugned order records that allowing/ non-allowing of Cross Examination is the discretion of the Adjudicating Authority, ignoring the fact that entire demand is based on the statement of Shri Soni, goes contrary to the settled position in law. Demand of Rs 70,320/- towards the goods lying within the factory as per the panchnama - HELD THAT - The fact that appellants have removed the goods for consumption by installing them in their own office and canteen premises is not in dispute. In my view the removal of the goods for personal consumption within the office and canteen premises of the appellant is removal of the goods as per the provisions of Central Excise Law. The value as has been indicated in the Panchnama has been ascertained from the coordinating architect. Both the authorities have concluded similarly in respect of this demand and there are no merits in the submissions made by the appellant in this respect. Thus this demand along with the interest as applicable confirmed. Rs 5,59,158.48 for the period 06.04.2001 to 21.08.2001 in respect of the goods cleared by wrongly availing the benefit of SSI exemption - HELD THAT - Undisputedly appellant were not eligible to the benefit of exemption under this notification. However it is also undisputed that appellant were duly filing their RT-12 returns during the Financial Year 2000-01 and the value of clearances of dutiable goods was indicated on the Rt-12 returns. The fact that they continued to clear the goods availing the benefit of this exemption during the year 2001-02 was duly reflected in their Rt-12 Returns filed. Original Authority has in the order in original recorded the fact that the appellant was filing the Rt-12 returns giving all the details (Para 14.2). That being so when the appellant 1 has duly declared all the facts in their Rt-12 returns, a fact acknowledged in the order in original, there are no merits in the order making this demand by invoking extended period of limitation as per proviso to section 11 A (1) - there are no merits in this demand by invoking the extended period of limitation as per proviso to section 11A (1). Imposition of Penalty on Appellant 1 - HELD THAT - In view of the fact that against the total demand of Rs.8,26,886/- which has been upheld by impugned order, there exists no position to the demand beyond Rs 70,320/-. Accordingly penalty under Section 11AC imposed on the Appellant is reduced to Rs 70,320/- from Rs 8,26,886/- imposed by the original authority and affirmed by the impugned order. Penalty on Appellant 2 and Appellant 3 - HELD THAT - No active role played by the appellant 2 and appellant 3 in respect of the evasion/ short payment of duty to the extent upheld by me, by the Appellant 1. Hence there are no position to uphold the penalties imposed upon Appellant 2 and Appellant 3 under Rule 209A of the Central Excise Rules, 1944. Appeal allowed in part.
Issues Involved:
1. Whether the confirmation of demand of Central Excise duty is justified. 2. Whether the imposition of penalties on all the appellants is justified. 3. Whether the appropriation of duty already deposited is justified. Issue 1: Confirmation of Demand of Central Excise Duty The demand of Rs. 1,06,687.52/- for goods cleared as per Invoice No. 16 & 18 dated 20.04.2001 was based on the assumption that 44 pieces were cleared, whereas the appellant claimed that only 14 pieces were cleared as reflected in the invoices. The tribunal found no merit in the demand due to lack of evidence from the revenue authorities. The demand of Rs. 90,720/- for goods alleged to be cleared to Sita Resorts was based on proforma invoices and a statement by the excise in-charge. The tribunal noted the absence of tangible evidence and the failure to allow cross-examination of the excise in-charge, leading to the dropping of this demand. The demand of Rs. 70,320/- for goods lying within the factory was upheld. The tribunal confirmed that the goods were removed for personal consumption within the appellant's premises, which constitutes removal under Central Excise Law. The demand of Rs. 5,59,158.48/- for goods cleared by wrongly availing SSI exemption was dropped. The tribunal noted that the appellant had duly declared all facts in their RT-12 returns, and thus, the extended period of limitation could not be invoked. Issue 2: Imposition of Penalties The penalty of Rs. 8,26,886/- imposed on Appellant 1 under section 11AC was reduced to Rs. 70,320/-, corresponding to the upheld demand. Penalties of Rs. 1,00,000/- each on Appellant 2 and Appellant 3 under Rule 209A were dropped. The tribunal found no active role played by these appellants in the evasion or short payment of duty. Issue 3: Appropriation of Duty Already Deposited The appropriation of Rs. 59,360/- already deposited was upheld. The tribunal confirmed that the duty deposited by the appellant was liable to be adjusted against the confirmed demand. Summary of Findings: - Goods cleared as per Invoice No 16 & 18: Rs. 1,06,687.52/- demand dropped. - Goods alleged to be cleared to Sita Resorts: Rs. 90,720/- demand dropped. - Goods lying within the factory: Rs. 70,320/- demand upheld. - Wrong availment of SSI exemption: Rs. 5,59,158.48/- demand dropped. - Interest: Upheld. - Penalty under Section 11AC on Appellant 1: Reduced to Rs. 70,320/-. - Penalty on Appellant 2: Rs. 1,00,000/- dropped. - Penalty on Appellant 3: Rs. 1,00,000/- dropped. Conclusion: - Appeal of Appellant 1: Partly allowed. - Appeals of Appellant 2 and Appellant 3: Allowed. Pronounced in open court on 12 March, 2024.
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