Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2014 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (9) TMI 660 - AT - Central ExciseClandestine manufacture and removal of goods - Imposition of penalty - Commissioner dropped penalty and duty demand that there was no clandestine activity - Held that:- demand is based on the difference between the weight of the goods mentioned in the invoices and the weight shown in the corresponding weighment slips. The Commissioner s finding is that the difference is 1% to 2% and the same may be on account of weight of the packing material and also that there is no evidence of the appellant having received any amount over and above in the invoice amount in cash. The Department s contention is that the average difference is not 1% to 2% but is much higher 4% to 5% since during the period of dispute i.e. during period from May 1992 to December 1992, the quantity of jute bags used were negligible - 2450 bags as against 35203 plastic bags used, there is no possibility of the weight increase on account of absorption of moisture by the jute bags which are hydroscopic in nature. As mentioned in para 6.2.2 of the Board s review order in some cases, the difference works out to 17.2%, 54% and 34.8% which is not possible. - matter remanded back. The Commissioner being satisfied with the respondent’s explanation has dropped the demand. However, the Department s contention as explained in para 6.3 of the review order is that in the day-to-day account of the consumption of packing bags was being maintained by the respondent and in it they were mentioning the closing balance of bags after deducting the number of bags issued for packing and number of bags gone waste from the sum total of the opening balance and the bags purchased and that there is clear manipulation in the account of the packing bags and as such their plea regarding 6496 bags becoming waste is not acceptable. It is seen that the Commissioner in his findings on this issue has not discussed the evidence on record in this regard as discussed in para 6.3 of the review order and he has come to an abrupt finding that the Department s allegation regarding clandestine clearance of 715.016 M.T. of CPC during period from May 1992 to June 1993 based on the consumption of packing bags is not acceptable. Therefore, this decision of the Commissioner also has to be set aside and the matter has to be remanded to the Commissioner for denovo adjudication. Clearances of 145.1 M.T. of RPC - In respect of this quantity of RPC, the respondent had taken Modvat credit and the same had been cleared as such. According to the Revenue, in terms of the provisions of Rule 9A (3A) of the Central Excise Rules, 1944, which were in force at the material time, in such cases of clearance of Modvat credit availed input as such, an amounts equal to the duty payable on the input at the rate of duty inforce on the date of clearance was required to be paid subject to the minimum of the credit originally taken. However, I find that there was similar provision in Rule 57F (1) (ii) of the Central Excise Rules, 1944 and interpreting the provisions of this Rule Larger Bench of the Tribunal in the case of CCE, Vadodara vs. Asia Brown Boveri Ltd. (2000 (7) TMI 110 - CEGAT, NEW DELHI) has held when modvated inputs are cleared as such, only an amount equal to the Modvat credit originally taken was required to be paid. In view of this, the Commissioner s finding on this point is correct. Penalty under Rule 209A of Central Excise Rules, 1944 on Shri Amitav Chaudhary, Director and Shri G.K. Rai, General Manager of the respondent company, while the Commissioner has dropped the penal proceedings against these two persons, the Department is of the view that these persons were accountable and responsible to the respondent company at the time when evasion took place and the evasion involving the respondent company and their sister unit would not be possible without the direct involvement of three two persons and, therefore, the Commissioner has wrongly dropped the proceedings against them. The question of imposition of penalty on them under Rule 209A of Central Excise Rules would arise only if the duty demand based on difference between the invoice quantity and the quantity mentioned in the weighment slip and the duty demand based on the discrepancies in the ground of bags is upheld. Remanded back - Decided partly in favour of Revenue.
|