Customs, Excise and Gold Tribunal - Mumbai
Shivkripa Ispat Pvt. Ltd. vs Commissioner Of Central Excise on 19 September, 2005
ORDER S.S. Sekhon, Member (T)
1. The appellants are an assessee engaged in the manufacture of CTD bars, Officers visited their factory on 6-8-2002 for physical stock verification. The weight of raw materials stock was worked out on average basis (80 kg per ingots), which worked out to 470.865 MT as against recorded stock of 365.465 MT. Similarly stock of finished goods was found to be 60,440 MT as against recorded stocks of 100.44 MT. This excess and shortage, as worked out, were considered to be liable for seizure. The duty on the shortage amounting to Rs. 80,000 was paid immediately. The goods seized were ordered to be provisionally released. A Show Cause Notice was issued and matter was adjudicated. The Jt. Commissioner issued the order confirming the demand of Rs. 80,000 in respect of shortage of finished goods and appropriation of the amount already paid along with confiscation of goods valued at Rs. 9,49,200/- and imposed a redemption fine of Rs. 2,00,000 under Section 34 of the Central Excise Act, 1944 and order appropriation of the same amount from the Bank guarantee. The penalty of equivalent amount i.e. Rs. 80,000 was imposed under Section 11AC & Rs. 10,000 under Rule 25 of Central Excise (No. 2) Rules, 2001. Commissioner (Appeals) upheld the order of the lower authority. Hence this appeal.
2. After hearing both sides & considering the material it is found
(a) The plea of excess goods & shortage were arrived at on average basis cannot be upheld, since the physical stock and book stocks arrived were on and at average basis. The basis of the stock taking being the same, the demands & payments on the shortage as made out are required to be confirmed and the plea of the assessee in this regard is to be rejected.
(b) As regards the inputs found in excess, it is found that the order does not clearly indicate the provisions of law under which the said confiscation has been arrived at. Liability to confiscation has to be specifically arrived at under provisions of law. Confiscation, therefore, of such excess inputs, as arrived at in this case, has to be set aside, as no material is shown to indicate why raw material as inputs, that inputs cannot be brought into the factory without duty paying documents. Confiscation as arrived cannot be upheld.
(c) As regards penalty under Section 11AC, following the settled position by the Larger Bench in the case of Machino Montell , the same is required to be set aside.
(d) The penalty under Rule 25 amounting to Rs. 10,000 is upheld.
3. In view of the findings, the appeal is allowed in above terms.
(Pronounced in Court)