Custom, Excise & Service Tax Tribunal
M/S.Vehlana Steel & Alloys P.Ltd vs Cce, Meerut on 4 November, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
Appeal No. E/1972/2011-(SM)
(Arising out of OIA No.27-CE/M-I/2011 dt.28.04.2011 passed by the Commissioner (Appeals), Central Excise, Meerut-I)
Date of hearing/Decision: 04.11.2013
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
M/s.Vehlana Steel & Alloys P.Ltd. Appellant
Vs.
CCE, Meerut Respondent
Present for the Appellant: None Present for the Respondent: Shri Sanjay Jain, DR Coram: Honble Mr.Manmohan Singh, Technical Member FINAL ORDER NO. 58433/2013 PER: MANMOHAN SINGH This appeal has been filed against the order in appeal No. 27-CE/M-I/2011 dt.28.04.2011 passed by the Commissioner (Appeals), Central Excise, Meerut-I, vide which the order of the adjudicating authority has been upheld wherein Commissioner (Appeals) has confirmed duty amounting to Rs.1,00,348/- and penalty of equivalent amount was imposed.
2. From the records, it is seen that the Central Excise Officers visited the factory and conducted stock taking and also take stock register. During the course of physical verification the stock of finished goods as well as raw material and detected shortages as detailed under:
Sl.
No. Description Qty as per books (M.T) Qty physically verified (M.T) Difference (M.T.) Shortage Value of stock Found short (Rs.) Duty (BED +E.Cess +HEd.Cess 1 M.S.Ingots 135.405 132.590 2.815 63,337/-
9,133/-
2Runner Riser 57.590 50.000 7.590 1,32,825/-
19,153/-
3Sponge Iron 482.775 442.700 40.075 4,99,735/-
72,062/-
4Silico Manganese 11.691 11.691 0 0 0
3. As per above chart, the discrepancy in M.S.Ingots, Runner Riser and Sponge Iron were detected. Since the goods were not found, it is the departments contention that these have been removed clandestinely without payment of duty. The notice had failed to maintain their books of account namely the production, storage and clearance account correctly in a manner reflecting the actual production of finished goods manufactured in the relevant period and also failed to maintain records of receipt and disposal, consumption and inventory of the raw materials solely with the intent to clandestine clearance of said finished goods and raw materials. The Commissioner (Appeals) held as under:-
As I have already said that the notice has been charged with clandestine removal of goods with intent to evade payment of duty. It is a fact that in any type of clandestine activity it is not possible to collect one-to-one evidence and such activity can at best be established by circumstantial evidence. It is also a fact that the burden to explain the shortage is on the assessee and if the assessee accepts the shortage without explanation, then it is not for the department to prove the charge of clandestine removal. Honble Tribunal in the case of M/s.Gulab Chand Silk Mills Ltd. V/s CCE, Hyderabad-2005 (184) ELT 263 (Tri.-Bang) held, In any type of clandestine activity, the persons try their best not to leave any evidence. We cannot expect persons indulging in clandestine clearance to faithfully put the details of all such clearances in some register and append their signature. This is never done. Hence, clandestine activity at best can be established only by circumstantial evidence. It should also be borne in mind that it will be humanly impossible to establish every link in the chain of clandestine activity. At the time of physical stock taking by Central Excise Officers and the panchnama and statement of Shri Vikrant Kumar Kamboj, accountant and authorized signatory of the unit, nowhere has denied the charge of shortage. All the evidences of the case fully establish the allegation of clandestine removal of both finished goods (MS Ingots/Runner/Riser) and raw material (Sponge Iron) and accordingly from the facts above, it is evident that submission by the noticeee that there was no evident to support the charge of clandestine removal is not sustainable. M/s.Vehlna Steels & Alloys (P) Ltd., Vehlana, Meerut Road, Distt-Muzaffarnagar, have violated provisions of Rules 4(1), 6, 8(1) 10(1) and 11(1) of Central Excise Rules, 2002 and Rule 9 of the Cenvat Credit Rules, 2004, as they failed to account for the production of finished goods, failed to proper assessment and clearance thereof on payment of proper finished duty on invoice in the manner as stipulated in the Rules ibid. It is established that the goods were removed clandestinely and accordingly the notice also attracts penal action.
The reliance of the notice is on case law which supports the fact unless fraud, collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of the Act or Rules with intent to evade payment of duty is there, Section 11AC cannot be invoked. But since the charge of contravention of the Act or the Rules with intent to evade payment of duty is established against the notice, he is liable to penalty. Evasion has been detected by Department having been caught on the wrong-foot, the notice cannot escape from payment of penalty. In the case of UOI V/s Rajasthan Spinning & Weaving Mills-2009-TIOL-63-CX, the Supreme held that: The decision in the Dharmendra Textiles Processors case-2008 (231) ELT 3 (SC) must, therefore be understood to mean that though the application of section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case, the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section 2 of section 11A. That is what the Dharmendra Textiles decides.
4. Commissioner (Appeals) has clearly found out that the goods were removed clandestinely and penalty was imposable.
5. Heard the ld.DR. None is present from the appellant side. I have gone through facts with the assistance of ld.DR.
6. I do not find any substance in the submission of the appellant stating that stock taking was on eye estimation basis and there was no attempt to clear the goods without payment of duty. I have also seen that panchnama of the proceedings was drawn and shortages were duly accepted by the appellant. No objection was raised on eye estimation. No letter of protest was lodged.
7. I further observe that Commissioner (Appeals) has rightly come to the conclusion of shortages which were admitted by appellants. It is observed that large scale shortages in respect of all the items of raw materials and finished goods are clear indication of evasion for which no records are kept.
8. In view of above, I do not find force in their contention and uphold the finding of the Commissioner (Appeals).
9. The appeal is dismissed.
(pronounced in the open court) (MANMOHAN SINGH) MEMBER (TECHNICAL) mk 4 4