Arham Petro Products Vs Commissioner of Central Tax (CESTAT Kolkata)
SSI Exemption Cannot Be Denied Without Proof of Use of Another’s Brand Name; Clandestine Removal Charge Fails Due to Absence of Buyers, Transporters and Supporting Evidence; Excise Demand Quashed Because Parallel Invoices Were Not Verified With Alleged Recipients; CENVAT Credit Cannot Be Denied Without Proving Non-Receipt of Inputs, Holds CESTAT.
In this case, the Department raised multiple demands against two manufacturers of disposable plastic cups and glasses, alleging shortages of finished goods and raw materials, clandestine removal of goods, wrongful availment of SSI exemption on products bearing the brand name “Essel,” irregular availment of CENVAT credit, and maintenance of parallel invoices. The demands, along with interest and penalties, were initially confirmed through an ex-parte adjudication order and were subsequently re-confirmed in de novo proceedings after remand by the Tribunal.
The Tribunal examined each allegation separately.
Regarding shortages of finished goods and raw materials, the Tribunal noted that no proper physical stock-taking had been conducted during the investigation. The stock position was determined merely on the basis of eye estimation. It held that shortages cannot be established solely through eye estimation and, therefore, the demands based on alleged shortages of raw materials and finished goods were unsustainable.
