Confiscation Fine under Excise Rules Reduces on Lack of Evidence on Excess SSI Exemption Limit: Supreme Court List Matter on Miscellaneous Day [Read Judgement]

In a recent case where the special leave petition ( SLP ) was filed against the Custom Excise Service Tax Appellate Tribunal ( CESTAT ) order, the Supreme Court listed the matter on a miscellaneous day, 26 November 2024. The Tribunal reduced the fines in lieu of confiscation under Excise Rules in the absence of evidence to prove the excessiveness of SSI Exemption limit.

Before the CESTAT, the revenue alleged that the appellant, Malu Electrodes Pvt Ltd was not showing the entire production of welding electrodes in their books of account and other statutory records thereby evading payment of duty.

The Revenue argued that the wire rods being manufactured were being used for unaccounted production of welding electrodes. The appellant was manufacturing flux, almost the entire production of the flux was being used by the respondent assessee for unaccounted production.

It was alleged that for the unaccounted production, raw materials and inputs were being purchased in the name of fictitious firms and payments for the same were being made in cash.

The CESTAT found that there is no evidence that the unit would have crossed SSI exemption limit and reduced the fine in lieu of confiscation to Rs.1,00,000/-. The unaccounted drawn wire rods were also not recorded in any books of account. The confiscation is in order and the fine imposed is not on the higher side and the same is upheld.

Justice Abhay S Oka and Justice Ujjal Bhuyan listed the matter on non-miscellaneous day.

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