2015 (9) TMI 565 - AT - Central Excise

Duty evasion - Whether or not the appellant collected in the name of excise duty any amount from their buyers which they failed to deposit to the Government - Held that - The plea of the appellant is that in all inclusive price purchase order they have only charged concessional rate of excise duty which they have deposited with the Government. However, the facts of the case as revealed from the records indicate that the rate mentioned in the purchase order is per piece price Central Excise duty of 10% or 13%. - The preparation of invoices in two sets with different details of assessable value and Central Excise duty for the same clearance was admitted by Shri D.K. Mattoo, Partner of the appellant firm. These details were elaborated in the impugned order-in-appeal also. The appellant s plea that preparation of different sets of original duplicate and triplicate or quatriplicate is only a procedural lapse is not at all tenable. The single clearance document having different factual details in original and triplicate cannot be considered as procedural lapse. The idea behind such act is to represent the price and Central Excise duty differently to the buyer. This is further corroborated by the fact that the appellant were also supplying oil filters to M/s Escorts Ltd. (CTD Division, Faridabad) who were availing Modvat credit and in that case, the appellant raise invoices in one set only giving all particulars correctly. The facts as narrated clearly establish that the appellant did collect amounts representing Central Excise duty and retained the same. As such we find that the same is to be paid to the credit of the Central Government in terms of Section 11D of the Central Excise Act, 1944. It is apparent that the appellant made documentation deliberately to this end and as such are liable for penalty under Rule 173Q. Regarding confiscation of the goods loaded into tempo, we find the same was in the factory premises and the confiscation was apparently ordered on the grounds of incomplete particulars in the records and discrepancy between the copies of invoice. We find since the goods are still in the factory premises and the documentation were required to be completed at the time of clearances, there is no sufficient cause to order the confiscation of said goods. Accordingly, we set aside that portion of impugned order regarding confiscation of goods. - Decided partly in favour of assessee.

Summary

Issues:
1. Applicability of Section 11D of the Central Excise Act, 1944 to the case.
2. Confiscation of goods and tempo.
3. Collection of excess excise duty from buyers and retaining the same.

Analysis:

1. Applicability of Section 11D:
The case involved the question of whether Section 11D of the Central Excise Act, 1944 applied to the appellant. The appellant contended that Section 11D would be applicable only if they collected an amount representing Central Excise duty from buyers but did not deposit it to the Government. The Department argued that the appellant collected excess amounts in the name of excise duty from buyers, as evidenced by discrepancies in invoices. The Tribunal found that the appellant indeed collected amounts representing Central Excise duty and retained them, contrary to their obligation to deposit it to the Government. Therefore, the Tribunal held that the appellant was liable under Section 11D and for penalty under Rule 173Q.

2. Confiscation of Goods and Tempo:
The issue of confiscation of goods and tempo arose due to incomplete details in records and discrepancies in invoices. The Tribunal noted that the goods were still within the factory premises and that confiscation was ordered based on incomplete documentation at the time of clearance. As there was no sufficient cause to justify the confiscation of the goods, the Tribunal set aside that portion of the order regarding confiscation.

3. Collection of Excess Excise Duty:
The appellant had been paying Central Excise duty at a concessional rate but collecting the full rate from buyers, resulting in an excess amount being collected towards excise duty. The appellant argued that they had paid the applicable duty and collected the same from buyers as per the agreement. However, the Department presented evidence showing that the appellant collected extra amounts in the name of Central Excise duty from buyers. The Tribunal found that the appellant's practice of maintaining two sets of invoices with different details indicated a deliberate attempt to collect excess amounts in the name of excise duty. The Tribunal relied on statements from buyers and partners of the appellant to establish this practice, leading to the conclusion that the appellant had indeed collected excess excise duty and retained it.

In conclusion, the Tribunal upheld the applicability of Section 11D to the appellant, set aside the confiscation of goods, and found the appellant liable for collecting excess excise duty from buyers. The appeal was disposed of accordingly.