Custom, Excise & Service Tax Tribunal
M/S. Aar Kay Industries vs Cce, Chandigarh on 23 September, 2009
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No. 2, R.K. Puram, NEW DELHI COURT No. III CENTRAL EXCISE APPEAL NO. 2466 of 2007-SM [Arising out of Order-in-Appeal No. 192-CE/CHD/2007 dated 19.6.2007 passed by the Commissioner (Appeals), Central Excise, Chandigarh] Dated of hearing/decision: 23rd September, 2009 For approval and signature: Honble Mr. P.K. Das, Member (Judicial) 1. Whether Press Reporters may be allowed to see the order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy of the order? 4. Whether order is to be circulated to the Departmental authorities? M/s. Aar Kay Industries Appellants Vs. CCE, Chandigarh Respondent
Appearance:
Shri Sidharth Joshi, Advocate for the appellants; Shri Sunil Kumar, JDR for the Revenue Coram:
Honble Mr. P.K. Das, Member (Judicial), FINAL ORDER NO._________________ dated __________ Per P.K. Das:
The relevant facts of the case, in brief, are that the appellant are engaged in the manufacture of Joist/Girders/TMT Bars classifiable under Heading 7228 of the Schedule to the Central Excise Tariff Act, 1944. On 9.11.2005 Central Excise officers visited the factory of the appellants and conducted stock verification. The said officers detected shortage of finished goods involving central excise duty of Rs. 6,93,298/-. Shri Ramesh Goyal, Director of the company admitted the shortage and debited the said amount from Cenvat account on 10.11.2005. A show cause notice dated 10.10.2006 was issued proposing to confirm demand of duty and imposition of penalty. Original authority held that the duty has been paid by the appellants prior to issuance of show cause notice, hence, no further demand notice is to be issued under Section 11A(2B) of the Central Excise Act, 1944. The amount of Rs. 6,93,298/- is appropriated as duty liability in respect of shortage detected. He also imposed penalty of Rs. 1.75 lakhs under Rule 25 of the Rules. Commissioner (Appeals) upheld the adjudication order.
2. Learned Advocate on behalf of the appellants submits that no proper stock taking was conducted. He submits that it is revealed from the stock taking report that the stock was ascertained on the basis of length and number of bars without ascertaining the actual stock. He submits that on the identical issue in their own case the Tribunal set aside the demand of duty as the stock taking was conducted by adopting calculation of number of pieces and weight of joists as reported in 2004 (165) ELT 412 (Tri. Del.). He also submits that the original authority held that no show cause notice is required as provided under Section 11A(2B) of the Act and, therefore, penalty is not sustainable.
3. Learned JDR on behalf of the Revenue reiterates the finding of the Commissioner (Appeals). He submits that the Director of the company has admitted the shortage and paid the duty. He also submits that stock taking report was signed by the representative of the appellant and no objection was raised and at this stage objection raised by the appellants cannot be sustained. He also submits that the appellants failed to explain the reason of shortage and, therefore, penalty is warranted.
4. After hearing both sides and on perusal of the records, I find from the stock taking report that the Director of the appellant company accepted the physical verification of Joist/Girders/TMT Bars which was conducted in his presence and he was fully satisfied. The Director deposited the entire amount of duty and no objection was raised at any point of time. Learned Advocate relied upon in their own case as reported in 2004 (165) ELT 412 (Tri. Del.). On perusal of the said decision, I find that the appellants have not deposited the duty in the said case. Therefore, the said case law is not applicable in the present case. Hence, the original authority rightly appropriated the amount as deposited by them.
5. However, I agree with the learned Advocate in respect of imposition of penalty. The original authority held that no demand notice is to be issued under Section 11A(2B) of the Central Excise Act, 1944 and appropriated the amount as deposited by the appellants. Therefore, imposition of penalty on the basis of the said show cause notice is not sustainable.
6. In view of the above discussion, impugned order is modified to the extent that amount of Rs. 6,93,298/- as appropriated by the original authority is upheld. Penalty is set aside. Appeal is disposed of in the above terms.
(Dictated & pronounced in the Open Court.) (P.K. DAS) MEMBER (JUDICIAL) RK 4