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of <h1>CESTAT Upheld Department's Claim on Clandestine Clearance by Manufacturers of Plywood and Compreg Boards</h1> <h3>COMMISSIONER OF C. EX., CHENNAI Versus COMPOSITE BOARDS (P) LTD.</h3> COMMISSIONER OF C. EX., CHENNAI Versus COMPOSITE BOARDS (P) LTD. - 2009 (244) E.L.T. 561 (Tri. - Chennai) Issues: Alleged clandestine clearance without accountal and duty payment during financial year 2002-03.In this case, the Appellate Tribunal CESTAT, Chennai dealt with the issue of alleged clandestine clearance by registered manufacturers of plywood and compreg boards during the financial year 2002-03. The officers found discrepancies between the value of clearances shown in the balance sheet and the Central Excise returns submitted by the assessees. The Department issued a Show Cause Notice proposing duty recovery invoking the extended period of limitation for suppression of facts. The adjudicating authority confirmed a demand for duty, interest, and penalties, which was set aside by the Commissioner (Appeals), leading to the Revenue's appeal.The main contention was the variance of around Rs. 11 lakhs between the values in the balance sheet and Central Excise returns. The assessees argued that the difference was due to rounding of figures and inclusion of trading activity value in the balance sheet. However, the Tribunal rejected these arguments. It held that the assessees failed to prove registration for trading activity and that the balance sheet did not separately reflect trading activity value. Consequently, the Tribunal concluded that the charge of clandestine clearance was established, setting aside the Commissioner's order and allowing the Revenue's appeal.Additionally, a cross-objection was filed by the assessees, which was dismissed by the Tribunal. The judgment emphasized the importance of accurate reporting and registration compliance in manufacturing and trading activities to avoid allegations of clandestine clearance and duty evasion. The decision reinforced the significance of maintaining consistent and verifiable records to substantiate business activities and financial disclosures in compliance with Central Excise regulations.
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