Surya Metalloy Pvt Ltd Vs Commissioner (Appeals) of Central Excise (CESTAT Delhi)
CESTAT Delhi held that demand unsustainable as difference between value of goods shown in ER-1 returns and balance sheet duly explained with sufficient evidence.
Facts- During the course of audit, it was noticed that the appellant, engaged in the manufacture of MS Ingots, appeared to have short paid Central Excise duty of Rs.86,45,221/- during FY 2015-16, in as much as there was an apparent difference of Rs.6,91,61,767/- in total value of goods sold as shown in their balance sheet in comparison to the value shown in ER-1 returns. It was noticed that the appellant had shown value as Rs.27,24,96,537/- in the ER-1 returns, whereas in the balance sheet the value was shown as Rs. 34,16,58,304/-. A show cause notice was issued to the appellant, proposing therein recovery of Central Excise duty of Rs.86,45,221/- alongwith interest and imposition of penalty under Section 11AC of the Act.
Conclusion- Held that appellant have lead sufficient evidence and explained the apparent difference. Both the Court below have not found anything erroneous or misgiving in the cogent explanation given by the appellant corroborated by books of accounts and vouchers. Undisputedly, appellant has profit from trading in commodities Rs. 8,52,60,853/- during the period. Further, the contentions are also supported by the certificate of the Chartered Accountant. I further find that there is a categorical finding recorded by the Commissioner (Appeals) in favour of the appellant to the effect that the appellant have properly explained the apparent difference supported by books of accounts- commodity trading account, ledger etc. Thus, in spite of finding that the apparent difference is properly reconciled, still the Commissioner (Appeals) have rejected the appeal by some irrelevant observations without there being any finding of fact against the pleadings of the appellant.
In view of my aforementioned findings and observations, I allow the appeal and set aside the impugned order. The appellant shall be entitled to consequential benefits, in accordance with law.
FULL TEXT OF THE CESTAT DELHI ORDER
The issue involved is whether Central Excise duty of Rs. 43,87,461/- have been rightly demanded alongwith interest and equal amount of penalty under Section 11AC of the Central Excise Act.
2. The brief facts of the case are that during the course of audit, it was noticed that the appellant holder of Central Excise registration No. AAQCS6094REM001, engaged in the manufacture of MS Ingots falling under Chapter heading 72061090, appeared to have short paid Central Excise duty of Rs.86,45,221/- during FY 2015-16, in as much as there was an apparent difference of Rs.6,91,61,767/+ in total value of goods sold as shown in their balance sheet in comparison to the value shown in ER-1 returns. It was noticed that the appellant had shown value as Rs.27,24,96,537/- in the ER-1 returns, whereas in the balance sheet the value was shown as Rs. 34,16,58,304/-. A show cause notice was issued to the appellant, proposing therein recovery of Central Excise duty of Rs.86,45,221/- alongwith interest and imposition of penalty under Section 11AC of the Act.
3. The appellant contested the SCN by filing reply dated 15.12.2020 explaining the apparent difference in the turnover shown in the balance sheet as well as in the ER-1 returns, as regards the goods manufactured and sold;
