Customs, Excise and Gold Tribunal - Bangalore
Agarwal Foundaries vs Commissioner Of C. Ex. on 28 July, 2006
ORDER T.K. Jayaraman, Member (T)
1. This appeal has been filed against the Order-in-Appeal No. 11/2006 (H-IV)-C.E., dated 7-2-2006, passed by the Commissioner of Customs & Central Excise (Appeals-II), Hyderabad.
2. The Central Excise officers visited the premises of the appellants. They found shortage of 28.765 MTs of finished goods valued at Rs. 5,17,770/-. The proprietor accepted the shortage and subsequently paid the duty. Revenue proceeded against various violations of Central Excise Act/Rules. The Apex Court confirmed the duty demand of Rs. 62,132/- and Education Cess Rs. 1243/- which have already been paid by the appellants on the shortage of the goods. Further interest was also demanded. A penalty of Rs. 20,000/- was imposed under Rule 25 of Central Excise Rules, 2002. The appellants approached the Commissioner (Appeals). The Commissioner (Appeals) has modified the order of the lower authority and passed the impugned order. The appellants strongly challenged the impugned order.
3. Shri L. N. Goyal, the learned Consultant appeared for the appellants and Shri K. S. Reddy, the learned JDR appeared for the Revenue.
4. The learned Advocate submitted the following points:
(i) When the search was conducted, the Proprietor, Shri Pramod Kumar Agarwal was not available in the premises.
(ii) Shri Pramod Kumar Agarwal was out of station for four days preceding the search. Only at about 1900 hrs during the search, the Proprietor Shri Pramod Kumar Agarwal came to the premises.
(iii) The Proprietor informed the officers that in his absence the employees had not maintained proper accounts. Actually there was no clandestine clearances. And there is no other evidence for establishing the charge of clandestine clearance.
(iv) At the time of search only Shri Sadananda Singh, Foreman was present. He stated that he did not have any idea about the reasons for shortage as he looked after the Electrical and Mechanical maintenance.
(v) No weighment was carried out as weighing facility is far away and no vehicle was engaged to carry out the weighment. Stock taking was only an eye estimate.
(vi) The Advocate relied on the decision of the Tribunal in the case of Hans Metals Pvt. Ltd. v. Commissioner of Central Excise, Kanpur wherein it was held that on the basis of wrong calculation of stock by eye-estimate clandestine removal cannot be alleged for the alleged shortage.
5. The learned JDR pointed out that the Proprietor accepted the shortage and paid the duty. Therefore it cannot be said that there was no shortage.
6. I have gone through the records of the case carefully. It is seen that the shortage was estimated only on the basis of eye-estimate and not on actual weighment. Moreover, when the alleged shortage was noticed, only the Foreman who looked after the electrical and mechanical work was present. The Proprietor contended that he was away for four days and his employees did not maintain proper accounts. There is no corroborative evidence to establish the shortage of finished goods. In these circumstances, the impugned order is not sustainable. Hence 1 allow the appeal with consequential relief.
(Operative portion of the order has been pronounced in the open court on completion of hearing)