Custom, Excise & Service Tax Tribunal
M/S.Shree Tele Fab Industries Pvt.Ltd vs Cce-Patna on 30 December, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.E/496/2010
(Arising out of Order-in-Appeal No.33/PAT/CEX/Appeal/2010 dated 24.03.2010 passed by the Commissioner(Appeals) Customs, Central Excise & Service Tax, Patna.)
FOR APPROVAL AND SIGNATURE
HONBLE SHRI S.S. KANG, VICE PRESIDENT
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
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s.Shree Tele Fab Industries Pvt.Ltd.
Applicant (s)/Appellant (s)
Vs.
CCE-PATNA
Respondent (s)
Appearance:
Shri B.N.Chattopadhyay, Consultant for the Appellant (s) Shri A.K.Sharma, Authorized Representative (JDR) for the Revenue (s) CORAM:
Honble Shri S.S.Kang, Vice President Date of Hearing/Decision :- 30.12.2010 Date of Pronouncement :- 30.12.2010 ORDER NO.
Per Shri S.S.Kang.
1. Heard both sides.
2. Appellant filed this Appeal against the impugned order whereby the demand along with interest is confirmed and penalty under Section 11AC of the Central Excise Act is imposed in respect of finished goods which was found short in the factory.
3. The main contention of the Appellant is that in absence of any evidence regarding clandestine removal of the goods the imposition of penalty is not sustainable. Appellants are not contesting the demand of duty.
4. The Appellant relied upon the decision of Honble Punjab & Haryana in the case of CCE, Ludhiana v. Fas Kusum Ispat (P) Ltd. 2009 (240) E.L.T. 13 (P & H). The contention is that the Honble High Court in absence of any evidence regarding clandestine removal and in absence of any explanation given by the Director held that penalty under Section 11AC of the Act is not sustainable as the Director is not dealing with day to day affairs of the company.
4. The contention of Revenue is that in the present case the stock verification was conducted in the presence of the Director Shri Deepak Kr. Aggrawal and Shri Vivek Kumar, authorized signatory and both of them had not explained regarding the shortage of finished products found at the time of verification. Shri Vivek Kumar, authorized signatory is looking after day to day affairs of the factory. Revenue also submitted that the verification was conducted on 25.07.2008 and it has come on record in the statement of Director that the last invoice was issued on 14.07.2008 i.e. invoice No.00060 dated 14.07.2008. Revenues submission is that from 14.07.2008 till the date of verification i.e. 25.07.2008 it is not possible that no clearance has been done. The contention is that the discrepancies in the stock compared to the statutory record was never informed to the Revenue therefore the Appellants are liable for penalty under Section 11AC of the Act.
5. I find that Appellants are working under Self-Assessment Procedure (SAP) therefore it is the responsibility of the Appellant to account for the dutiable inputs on which credit has been availed and the finished product which is liable for duty. The verification was conducted on 25.07.2008 and it was found that finished goods were found short. The Director and authorized signatory made a detailed statement but no explanation regarding shortage is given. Shri Vivek Kumar, authorized signatory is looking after the day to day affairs of the firm. Appellant relied upon the decision of the Honble Punjab & Haryana High Court in the case of Fas Kusum Ispat (P) Ltd.. In that case after taking into the facts that there was no evidence regarding clandestine removal and Director is not dealing with the day to day affairs of the company therefore the Tribunal set aside the penalty and the Honble High Court upheld the order passed by the Tribunal. In the present case the shortage is not even explained by Shri Vivek Kumar who is looking after day to day affairs of the firm hence the ratio of decision relied upon by appellant is not applicable to the facts of the present case. As per the provisions of section 11AC where any duty of excise has not been levied or paid or has been short levied or short paid by reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any provisions of the Act or Rules with intent to evade payment of duty the person is liable to pay penalty equal to the duty so determined.
6. In the present case the Appellants failed to inform the Revenue prior to the verification regarding discrepancies in the stock of finished goods. Finished goods are liable to duty. In these circumstances I find no infirmity in the impugned order whereby the penalty under Section 11AC of the Act is imposed. Appeal is dismissed.
(Pronounced and dictated in the open court.) Sd/ (S.S.KANG) VICE PRESIDENT sm 4 Appeal No.E/496/2010