Surya Wires Pvt. Ltd. Vs Principal Commissoner (CESTAT Delhi)
Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi, has set aside a significant central excise duty demand and associated penalties confirmed against M/s. Surya Wires Pvt. Ltd. and its Director. The Tribunal’s decision primarily hinged on the non-adherence to mandatory evidentiary procedures under Section 9D of the Central Excise Act, 1944, concerning the reliance on statements recorded during investigation.
Allegations of Shortage and Clandestine Removal
The case stemmed from an investigation conducted by Central Excise Officers at Surya Wires’ factory premises on April 8, 2016. During the probe, officers noted alleged shortages of finished goods, including GI Wire and HB Wire, and raw materials such as Wire Rod and Waste/Scrap. The department asserted that the company’s Director, Harsh Agrawal, had admitted to these shortages and even paid a portion of the central excise duty (₹65 lakh) thereon. The alleged duty implication for these shortages was ₹3,04,24,623/-.
Furthermore, the investigation claimed to have uncovered loose papers that indicated clandestine removal of GI Wire without valid invoices or duty payment. The duty evaded on this alleged clandestine removal was quantified at ₹1,76,650/-. A show cause notice was issued to Surya Wires and its Director on November 13, 2018, nearly two years and seven months after the initial investigation, invoking the extended period of limitation.
