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2017 (1) TMI 420 - CESTAT MUMBAI

2017 (1) TMI 420 - CESTAT MUMBAI - TMI - SSI unit - evasion of duty - misuse of facility afforded by the small scale exemption notification - unaccounted production with clandestine removal thereof - natural justice - Held that: - the test that must be passed requires an assailing that must be sustained for acceptability. In the present disputes, the recast register has not been subject to the test. It is not necessary that there be a register in physical form but it is incumbent that the method .....

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Makrand Joshi, Advocate for the appellants Shri Ashuthosh Nath, Asstt. Commissioner (AR) for the respondent ORDER Per C J Mathew Four appeals have been filed against impugned order-in-original no. 14/ASR/2005-ADJ dated 11th April 2005 of Commissioner of Central Excise, Pune-III and these are disposed off by this common order. Challenge is to recovery of duties of central excise of ₹ 9,09,892 from M/s Desai Electronics Pvt Ltd, confiscation under rule 173Q(1) of Central Excise Rules, 1944 o .....

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allowed to be redeemed on payment of fine of ₹ 3,37,000 and imposition of penalty of ₹ 5,00,000, ₹ 2,00,000 and ₹ 3,00,000 respectively on M/s Desai Electronics Pvt Ltd, M/s Desai Engineering Pvt Ltd, M/s Desai Engineering. The plant, machinery, land and building of M/s Desai Electronics Pvt Ltd were also ordered to be confiscated but allowed to be redeemed on payment of fine of ₹ 3,00,000 and penalty of ₹ 1,00,000 was imposed on Shri VM Desai, who held the o .....

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9,09,891.64 was confirmed in the impugned order. 3. It would appear that M/s Desai Electronics Pvt Ltd and M/s Desai Engineering Pvt Ltd were manufacturers of capacitors under the brand names of DEC and DEG respectively while M/s Desai Engineering (a partnership firm) traded in capacitors. It was held that goods valued at ₹ 3,51,862.30 branded as DEC seized from the trading entity had not been accounted for in the manufacturing record of M/s Desai Electronics Pvt Ltd and were, therefore, .....

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.26. Holding that M/s Desai Engineering Pvt Ltd had sold capacitors branded as DEC to the extent of ₹ 3,40,491 in excess of supplies from M/s Desai Electronics Pvt Ltd which were allegedly removed from the premises of the latter without paying duty of ₹ 53,627.40, this amount was added to the liability to be recovered from M/s Desai Electronics Pvt Ltd. M/s Desai Electronics Pvt Ltd challenges this entire recovery supra of ₹ 3,09,276.91. 4. In relation to supply of capacitors v .....

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clandestine clearances valued at ₹ 3,73,043.53 was also fastened on M/s Desai Electronics Pvt Ltd. Capacitors valued at ₹ 8,15,380,65 that was claimed to be clearances of repairs back to customers was also held to be removals of finished stock on which duty of ₹ 1,289,422.45 was ordered to be recovered. Free replacement of capacitors valued at ₹ 49,155 with duty liability of ₹ 7741.91 was held to be a false claim and recovery ordered. Demand of ₹ 3,71,289.70 w .....

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case against the assessee revolves around two distinct aspects: evasion of duty by misuse of facility afforded by the small scale exemption notification and evasion of duty by unaccounted production with clandestine removal thereof. The adjudicating authority has dropped the first and confirmed the second. The modus operandi that led to the confirmation was the manufacture of capacitors by two units and carrying out trading of these manufactured goods through an entity of the manufacturer afford .....

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ed. It is contended that the adjudication authority has failed to consider the submissions of appellants that the demand is barred by limitation. 6. That there are certain discrepancies and unexplained aspects of the business carried on by the trading entity is apparent from the show cause notice. However, considering the challenge in appeal to the manner in which the adjudicating Commissioner has come to the conclusion that the evasion of duty by clandestine removal has been established, it wou .....

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ments. Further reliance was placed on the decision of the Hon ble Supreme Court in re Sanjay Vimalbhai Deora upholding the ruling of the Hon ble Supreme Court in Sanjay Vimalbhai Deora v. CESTAT [2014 (306) ELT 533 (Guj)] approving the imposition of penalty under rule 26 of Central Excise Rules, 2002 even if confiscation of goods had not been proposed in the show cause notice. Likewise, the decision of the Hon ble Supreme Court affirming the decision of the Hon ble High Court of Allahabad in Som .....

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