2015 (2) TMI 1086 - AT - Central Excise

Duty demand - Clearance of goods without payment of duty - Non maintenance of proper documents - Held that - Appellant s director has admitted clearance of the goods without payment of duty without accounting any records and from the statement or details provided from him no further investigation could have been carried out. In view of the said position in the facts and circumstances of the case the demand is upheld. As far as the contention of the ld. counsel about the cross examination is concerned in view of the Supreme Court decision in Surjeet Singh Chhabra (supra) the contention is rejected. As far as the limitation is concerned the place was searched on 24.09.2003 and the show-cause notice has been issued on 28.12.2007 which is within five years and therefore keeping in view the clandestine nature of the clearance the proviso to Section 11A would be applicable. However as far as penalty is concerned we find that in the investigation further details have not been investigated and under the circumstances penalty imposed under Section 11AC is set aside. - Decided in favour of assessee.

Summary

Issues:
Manufacture of MS ingots without payment of duty, admission in statement, demand of `8 lakhs, penalty under Section 11AC, cross-examination, limitation period, proof for penalty imposition.

Analysis:
The case involves the appellant firm engaged in the manufacture of MS ingots, where a search revealed unaccounted clearances without duty payment. Statements of key personnel admitting to the irregularities were recorded, leading to a demand of `8 lakhs and imposition of penalties under Section 11AC. The appellant challenged the order on grounds of lack of corroboratory evidence, denial of cross-examination, and limitation period expiry. The appellant cited relevant judgments to support their contentions.

The Tribunal noted the admissions made by the appellant's director regarding the unaccounted clearances and duty liability, supported by statements from other employees. The retraction of statements after a significant period was deemed irrelevant, as admitted facts need not be proved. Citing legal precedents, the Tribunal upheld the demand based on the admissions and lack of further investigatory avenues due to the statements. The contention for cross-examination was rejected based on the principle established by the Supreme Court. The show-cause notice issued within the five-year limitation period was deemed valid, considering the clandestine nature of the clearances. However, the penalty under Section 11AC was set aside due to insufficient investigation details.

In conclusion, the Tribunal upheld the demand based on admissions, rejected the cross-examination contention, validated the limitation period for issuing the notice, and set aside the penalty under Section 11AC due to lack of further investigation. The appeal was disposed of accordingly.