2013 (11) TMI 624 - AT - Central Excise

Appellate Tribunal directs predeposit in duty liability appeal, highlights importance of evidence examination

The Appellate Tribunal CESTAT BANGALORE directed the appellant to make a predeposit of Rs.20 lakhs within eight weeks, with a waiver of predeposit and ... Goods written off but not found in factory – Duty Liability - Waiver of Pre-deposit - Whether the appellant is liable to pay duty on inputs/capital goods written off in their account but not found in the factory – Held that:- The appellant has not been making true statements in the balance sheet itself and the figure shown in the balance sheet were false and there are findings by the officers who visited the factory which, according to the appellant, are not correct - the issues involved are very complicated and require detailed consideration of various documents for arriving at any conclusion as to whether the appellant is liable to pay duty or not - in the case of capital goods at least, prima facie, the legal provisions appear to support their contentions - the counsel was asked to make an offer of pre-deposit for consideration - appellant is directed to deposit an amount of Rupees twenty lakh as pre-deposit – upon such submission rest of the duty to be waived till the disposal – Partial stay granted. Issues involved:1. Liability to pay duty on inputs/capital goods written off but not found in the factory.2. Valuation of final products written off and not found in the factory.3. Provision for payment of excise duty on capital goods written off.4. Credibility of the appellant's statements in the balance sheet.5. Acceptability of appellant's contentions in light of false balance sheet figures.6. Consideration of legal provisions regarding liability to pay duty on capital goods.7. Offer of predeposit by the appellant for consideration.Analysis:The primary issue in the present stay application before the Appellate Tribunal CESTAT BANGALORE is whether the appellant is liable to pay duty on inputs/capital goods that were written off in their account but were not found in the factory by visiting officers. Additionally, the final products, valued at over Rs.2 crores, which were also written off but not located in the factory, are under scrutiny. The appellant's defense revolves around the allegation that they had inflated stocks to avail benefits such as working capital limits and loans, rectifying the false accounts after assistance from group companies to repay loans. The contention is supported by the absence of a provision for excise duty payment on capital goods written off before 2006 when CENVAT credit was availed. However, discrepancies in the balance sheet figures, deemed false by visiting officers, raise doubts about the appellant's credibility.Upon hearing arguments from both sides, the Tribunal acknowledges the complexity of the issues at hand, necessitating a detailed examination of various documents to determine the appellant's duty liability. While the appellant's credibility is questioned due to discrepancies in their statements and balance sheet figures, the legal provisions seem to support their contentions regarding capital goods. As a result, the appellant is directed to make a predeposit of Rs.20 lakhs within eight weeks, with a waiver of predeposit and stay against recovery of balance dues during the appeal's pendency upon compliance. This decision is reached considering the intricacies of the case and the need for further scrutiny before concluding on the appellant's liability for duty payments.In conclusion, the judgment by the Appellate Tribunal CESTAT BANGALORE highlights the importance of thorough consideration of evidence and legal provisions in determining duty liability on written-off inputs/capital goods. The decision to accept the appellant's predeposit offer reflects a balanced approach to the complexities involved in the case, emphasizing the need for a comprehensive review of documents and statements to arrive at a final conclusion regarding duty obligations.