Custom, Excise & Service Tax Tribunal
M/S Vandana Global Limited vs Cce, Raipur on 5 July, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV DATE OF HEARING : 24/06/2016. DATE OF DECISION : 05/07/2016. Excise Appeal No. 1563 of 2007 (SM) [Arising out of the Order-in-Appeal No. 45/RPR-I/2007 dated 22/02/2007 passed by The Commissioner (Appeals-I), Central Excise & Customs, Raipur.] For Approval and signature : Honble Shri V. Padmanabhan, Member (Technical) 1. Whether Press Reporters may be allowed to see :No 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 :Seen copy of the order? 4. Whether order is to be circulated to the :Yes Department Authorities? M/s Vandana Global Limited Appellant Versus CCE, Raipur Respondent
Appearance Ms. Surabhi Sinha, Advocate for the appellant.
Ms. Kanu Verma, Authorized Representative (Jt. CDR) for the Respondent.
CORAM: Honble Shri V. Padmanabhan, Member (Technical) Final Order No. 52305/2016 Dated : 05/07/2016 Per. V. Padmanabhan :-
This appeal is directed against the order-in-appeal dated 22/02/2007 passed by Commissioner (Appeals), Raipur.
2. Central Excise Preventive officers conducted checks and verifications in the appellants factory on 13/09/2005 during which on physical verification of stock of finished goods, shortages from recorded balance were noticed in respect of finished products namely Sponge Iron and Runners and Risers involving a total Central Excise duty to the tune of Rs. 3,51,041/-. The appellant accepted the shortages and paid the Central Excise duty due on the same. The Original Authority, the Assistant Commissioner, vide his order dated 30/11/2006 confirmed and appropriated the excise duty paid. He also imposed penalty equal to the amount of duty under Section 11AC and also a penalty of Rs. 10,000/- under Rule 25 of the Central Excise Rules, 2002. When this was challenged before Commissioner (Appeals) he upheld the demand as well as the penalty imposed under Rule 25. However, he set aside the penalty imposed under Section 11AC.
3. Heard Ms. Surabhi Sinha, the learned Counsel for the appellant as well as Ms. Kanu Verma, the learned Jt. CDR on behalf of Revenue. Learned Counsel for the appellant seeks to set aside the demand alongwith penalty for the reason that no evidence of clandestine removal has been produced by the Revenue. Solely on the basis of the statement of the appellants representative, demand and penalty cannot be confirmed. In their support they have relied on the following case laws :-
(i) Zincollied (India) vs. CCE, Vapi reported in 2013 (297) E.L.T. 370 (Tri. Ahmd.) ;
(ii) Galaxy Textiles vs. CCE, Vapi reported in 2011 (263) E.L.T. 604 (Tri. Ahmd.) ;
(iii) CCE, Lucknow vs. Roll Tubes Ltd. reported in 2011 (265) E.L.T. 414 (Tri. Del.) ; and
(iv) Kripal Springs (I) Ltd. vs. CCE, Bhubaneswar II reported in 2001 (133) E.L.T. 782 (Tri. Kolkata).
4. The learned Jt. CDR on the other hand has argued that in as much as the shortages have been admitted by the Director of the firm who is also satisfied with the manner and style of the stock taking proceedings, the orders of the Authorities below upholding the demand and imposing penalty should be upheld. She cited the decision in S.M. Steel Rops vs. CCE (Adj.), Mumbai reported in 2014 (304) E.L.T. 591 (Tri. Mumbai) to support her views.
5. As per the provisions of Rule 10 of the Central Excise Rules, 2002, every assessee is required to maintain a daily stock account indicating the particulars regarding description of the goods produced or manufactured, opening balance, quantity manufactured, quantity removed etc. There is no dispute on the fact that the stock taking was conducted by the Central Excise officers to the satisfaction of the Director of the firm who was present. The shortages noticed during the proceedings has also been fairly recorded in the Panchnama. Accordingly, the assessee is required to pay the Central Excise duty on the finished products found short. I also find that this duty stands paid and appropriated by the Authorities below. From the records, I find that no investigation has been undertaken to establish clandestine removal which appears to have been presumed. Therefore the setting aside of the penalty under Section 11AC in the impugned order cannot be faulted and is upheld. In as much as the assessee has failed to keep the daily stock account up-to-date as required under the provisions of Rule 10, they have contravened the provisions of the Rule and liable for imposition of penalty under Rule 25. I am also of the view that the penalty of Rs. 10,000/- imposed on the appellant cannot be said to be too harsh.
6. Accordingly, the appeal is disposed of in the above terms.
(Order pronounced in the open court on 05/07/2016.) (V. Padmanabhan) Member (Technical) PK ??
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