2000 (1) TMI 612 - AT - Central Excise

Summary

Issues: Duty demand on Sodium Silicate; Suppression of production and clearance; Mis-representation by the assessee; Imposition of penalty.

The judgment by the Appellate Tribunal CEGAT, New Delhi involved an appeal arising from a duty demand of Rs. 2,81,169.70 against M/s. Bharat Silicate Industries for clearing Sodium Silicate without payment of duty by suppressing production and misrepresenting facts. The Collector of Central Excise, Pune confirmed the duty demand and imposed a penalty of Rs. 1.75 lakhs on the company. The case revolved around a visit by Central Excise Preventive officers to the factory premises of M/s Bharat Silicate Industries, where discrepancies were noted, including the closure of the unit, dismantled equipment, and the transfer of sodium silicate from another entity, Bharat Chemical Works, to evade duty payment.

During the visit, it was observed that Bharat Silicate Industries was closed, while Bharat Chemical Works was operational, transferring sodium silicate through concealed pipes to Bharat Silicate Industries with the intent to evade duty. Statements from key individuals, including the proprietors and employees of both units, confirmed the operation of Bharat Chemical Works and the closure of Bharat Silicate Industries for the past two years. The evidence presented by the Superintendent of Central Excise supported the closure of Bharat Silicate Industries, further strengthening the case against the appellants.

The Tribunal concurred with the Adjudicating authority's finding that the production of Bharat Chemical Works was falsely represented as the production of Bharat Silicate Industries. Despite being seemingly separate units, they were deemed as one entity, leading to the exceeding of the ceiling limit prescribed in the Small Scale Industries (SSI) notification when clubbing the clearances of both units. Consequently, the duty demand and penalty imposed were upheld, as the appellants did not contest that combining the clearances exceeded the prescribed limit. The Tribunal rejected the appeals, affirming the validity of the duty demand and penalty imposed on M/s. Bharat Silicate Industries.