2025-VIL-680-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Clandestine manufacture, Excise duty evasion, Extended period of limitation, Penalty under Section 11AC - The appellant is a registered manufacturer of SS Billets, SS Flats, SS Rounds and MS Billets. During a search conducted on the appellant's factory premises, the officers found that the appellant had suppressed the quantity of SS Billets/SS Flats removed by it in a clandestine manner without paying the central excise duty. The officers found discrepancies between the RG-1 production register and the appellant's private records, which showed higher production. Based on the seized documents, the department issued a show cause notice demanding excise duty of Rs. 1,56,65,763/- with interest and imposed an equal amount as penalty under Section 11AC of the Central Excise Act - Whether the department has established the clandestine manufacture and removal of goods by the appellant through positive and cogent evidence - HELD - The evidence in the form of the appellant's own private records maintained separately, which showed higher production compared to the RG-1 register, was sufficient to conclude that the appellant had clandestinely manufactured and cleared the goods without paying the full excise duty - Clandestine removal, by its nature, is secretive, and therefore, can only be established through indirect evidence - The appellant did not dispute the recovery of the documents or show why the production was recorded differently in the private registers. The statements recorded during the investigation were also not retracted - Therefore, there was positive evidence to conclude that the appellant had suppressed part of its production, and hence, the entire demand of excise duty was upheld - The impugned order is upheld and the appeal is dismissed - Whether the extended period of limitation under Section 11A(4) was correctly invoked by the department - HELD - The extended period of limitation under Section 11A(4) was correctly invoked as the demand was based on the allegation of suppression of facts by the appellant - Since the duty was not paid on the entire production, the extended period of limitation was rightly invoked - Whether the imposition of penalty under Section 11AC was justified - HELD - The Tribunal upheld the imposition of penalty under Section 11AC, as it found that the appellant had suppressed facts with an intent to evade payment of duty - Since the demand of excise duty was sustained, the penalty under Section 11AC was also justified.
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