Custom, Excise & Service Tax Tribunal
M/S. Hindusthan Seals Ltd vs Commissioner Of Central Excise, ... on 26 March, 2012
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
EAST ZONAL BENCH: KOLKATA
EXCISE APPEAL NO.E/A/453/2006
(ARISING OUT OF ORDER-IN-APPEAL NO.24/KOL-IV/2006 DATED 31.01.2006 PASSED BY COMMISSIONER OF CENTRAL EXCISE (APPEAL-IV), KOLKATA)
FOR APPROVAL AND SIGNATURE OF
SHRI S.K.GAULE, HONBLE TECHNICAL MEMBER
DR. D.M.MISRA, HONBLE JUDICIAL MEMBER
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 should 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. HINDUSTHAN SEALS LTD.
APPELLANT (S)
VERSUS
COMMISSIONER OF CENTRAL EXCISE, KOLKATA-IV
RESPONDENT (S)
APPEARANCE:
SHRI M.K.BHATTACHARYA, CONSULTANT FOR THE APPELLANT(S) SHRI D.K.NATH, A.R.(ASSTT. COMMR.) FOR THE REVENUE. CORAM:
SHRI S.K.GAULE, HONBLE TECHNICAL MEMBER DR. D.M.MISRA, HONBLE JUDICIAL MEMBER Date of Hearing/Decision:26.03.2012 ORDER NO Per Dr. D. M. Misra This is an Appeal filed against the Order-in-Appeal No.24/KOL/04/2006 dated 31.01.2006 passed by the Commissioner of Central Excise (Appeals).
2. Briefly stated the facts of the case are that the Appellants factory was visited by the Officers on 19.07.2000. On stock-taking, discrepancy was noticed in the finished stock as well as in raw materials stock. The Officers noticed excess quantity of finished goods namely, Aluminium Ingots of 30.831 MT valued at Rs.21,27,339/- and raw materials namely, TF sheets of 21.023 MT valued at Rs.5,28,644/- and MS pipe channel of 18.859 MT valued at Rs.4,33,757/-. The said excess finished goods as well as raw materials were seized and later released provisionally on execution of bond and bank guarantee. A show cause notice was issued to them on 11.01.01 proposing confiscation of the said excess goods seized. The Adjudicating Authority had confiscated the seized goods under Rule 173Q of the Central Excise Rules, 1944 and imposed a redemption fine of Rs.7,00,000/- and penalty of Rs.50,000/-. Aggrieved by the said Order, the Appellant filed an Appeal before the Commissioner of Central Excise (Appeals) who, after considering the submissions of the Appellant, remanded the case for de novo adjudication. By his Order dated 18.03.2004, in the de novo adjudication, the learned Additional Commissioner has confiscated the goods and imposed a redemption fine of Rs.7,50,000/- and penalty of Rs.50,000/- under Rule 173Q of erstwhile Central Excise Rules, 1944. On appeal, the learned Commissioner (Appeals) upheld the said Order of the Adjudicating Authority passed in de novo adjudication. Hence the present Appeal.
3. Learned Advocate appearing for the Appellant had not disputed the imposition of penalty by the Adjudicating Authority. However, he has questioned the legality and correctness of confiscation of the finished goods as well as the raw materials and consequently, imposition of redemption fine. He submitted that the learned Commissioner(Appeals) had not considered their submission that in the first adjudication Order, the excess goods and raw materials were confiscated by imposing redemption fine of Rs.7,00,000/-. Further, he has submitted that the excess finished stock found in the Appellants premises had been duly acknowledged to have been received from M/s. Spark Export Ltd. In this regard, he has drawn our attention to para 2.5.6 of the impugned notice. He has submitted that the excess stock was lying in his factory premises for rectification and there was no attempt whatsoever, on the part of the Appellant for removing the same from the factory or any other goods cleared from the factory clandestinely. He has further submitted that the excess raw materials found during the course of visit on 19.07.2000 are also not liable for seizure, as the said inputs are duty paid and MODVAT Credit was yet to be availed by them on the date of visit of the officers. He has contended that in these circumstances, the goods are not liable for confiscation. However, he has fairly accepted that they could not properly account for the excess goods and inputs at the time of visit of the officers, but later details of it were submitted to the Department.
4. Learned AR (Dy. Commissioner) appearing for the Department reiterated the findings of the learned Commissioner (Appeals).
5. Heard both sides and perused the records.
6. We find that the excess finished goods found in the factory premises of the Appellant were though not initially explained, but later properly explained as belonging to one M/s. Spark Exports Ltd. The excess raw materials found in the factory premises were duty-paid and MODVAT Credit had not been availed on the same. It is also not brought on record by the Department that the said stock of inputs were meant to be used in the manufacture of goods for clandestine removal. We do not agree with the finding of the learned Commissioner (Appeals) that the Appellant had failed to establish that the said excess finished goods were received from M/s. Spark Exports Ltd., as the said fact has been acknowledged in the impugned notice. The mere fact that the excise clerk in his statement dated 18.07.2000 could not explain at the time of visit of Officers, does not mean that the said goods were not properly accounted for by the Appellant. The learned Commissioner (Appeals) also has not recorded any finding as to why the excess inputs found in the factory premises are liable to be confiscated, when not MODVAT Credit was availed on the same. However, we find that there is some discrepancy in maintaining proper records of receipt of the goods for rectification from M/s. Spark Exports Ltd., for which the Appellant are liable for penalty. But the said goods are not liable for confiscation, as there is no evidence on record that such excess stock are attempted to be cleared clandestinely without payment of duty, which has already suffered duty and received in the factory premises for rectification. Also, we do not find any reason for confiscation of inputs which were duty-paid and no MODVAT Credit was availed on the same. In these circumstances, we do not find merit in the impugned Order of the Commissioner (Appeals) to the extent of upholding the confiscation directed by the lower authorities. Consequently, we set aside the impugned Oder to the extent of upholding the confiscation of the seized goods, but as we have observed that some penalty is liable to be imposed and the learned Advocate at the outset conceded not to contest the imposition of penalty, the amount of penalty already deposited is sufficient to meet the needs of Justice. The Order of the Commissioner of Central Excise (Appeals) is set aside to the extent of upholding the confiscation of the finished goods and raw materials. The Appeal is allowed in above terms.
Operative part of the Order pronounced in the court on 26.03.2012.
Sd/- Sd/-
(S.K.GAULE) (D.M.MISRA)
TECHNICAL MEMBER JUDICIAL MEMBER
DUTTA/
1 EXCISE APPEAL NO.E/A/453/2006