INDO FURNACE (P.) LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) RULE 12CC of the Central Excise Rules, 2002, empowers the Central Government to specify the nature of restrictions including suspension of registration as a measure aimed at preventing evasion of excise duty. Rule 12AA of the CENVAT Credit Rules, 2004, similarly confers power upon Central Government to provide for certain measures necessary to prevent misuse of the CENVAT Credit. In exercise of the power so vested the Central Government have issued a -CE(NT), dated 30 -12 -2006, declaring that where a manufacturer, first stage or second stage dealer, or an exporter including a merchant exporter is prima facie found to be knowingly involved in any of the acts enumerated therein, an officer authorized by the Board may order withdrawal of the facilities or impose the restrictions specified in para 2 of the said notification. Paras 1 and 2 of the notification to the extent, the same are relevant may be extracted at this stage:

(2.) FACILITIES to be withdrawn and imposition of restrictions.:(1) Where a manufacturer is prima facie found to be knowingly involved in committing the offences as specified in para 1, the following restrictions may be imposed on the facilities, namely:

(3.) WE have heard learned Counsel for the parties and perused the record. The order under challenge came to be passed when an officer of Anti Evasion Branch, Government of India, Department of Revenue deputed to the factory premises of the petitioner saw a vehicle coming out of the factory premises. On interception, the vehicle was found to be carrying 9.9 MT of M.S. Girder, without any accompanying invoice. Investigation revealed that the vehicle was being used for clandestine removal of the goods without an invoice and without payment of duty. Stock taking of finished goods and raw material, further revealed a shortage of 346 MT of M.S. Girders and 349 MT of M.S. Ingots. Besides, 59,393 litres of Furnace Oil was also found short, on which Cenvat credit had been taken. The total duty evasion was estimated to be Rs. 20,24,747. The incident regarding the removal of goods without payment of duty was corroborated by the statement of the driver, Sh. Joginder Sharma, who admitted that no invoice had been given to him for the excisable goods loaded in the vehicle. Sh. Satish Kaushik, Manager and authorized signatory of the petitioner also admitted in his statement that the goods carried in the vehicle were cleared without payment of duty and were meant for sale in the market. Sh. Vinod Agarwal, Director of the company too admitted to such clandestine removals of finished goods without payment of duty. It was on the basis of the admissions so made by the responsible officers and representatives of the company that the impugned order was issued withdrawing the facilities referred to earlier for a limited period of six months.