Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, Nagpur vs M/S Acc Ltd on 16 April, 2008
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. II Appeal No. E/1295/07 (Arising out Order-in-Appeal No. SVS/217/NGP-II/07 dated 25.6.07 passed by the Commissioner of Central Excise (Appeals) Nagpur) For approval and signature: Honble Mr. M.V. Ravindran, 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 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?
Commissioner of Central Excise, Nagpur Appellant Vs. M/s ACC Ltd.
Respondent Appearance:
Shri S.N. Prasad, SDR for the appellant Shri D.H. Nadkarni, Advocate for the respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Date of hearing : 16.4.2008 Date of decision : 16.4.2008 O R D E R No:..
Per: Mr.M.V. Ravindran, Member (Judicial) This appeal is filed by the revenue against order in appeal no. SVS/217/NGP-II/07 dated 25.6.07
2. The issue involved in this case is regarding the demand of duty on the quantity of the cement which has been noticed as excess despatched by the respondent. The respondents fill the cement bags with cement and tagged the weight of the cement bags and while despatching second weighment is done. The authorities during the course of audit it was noticed that during the period from April 2000 to July 2000 there was a difference in weight as shown in the invoice and as per the weighment slip, coming to the conclusion that the respondent had cleared the said cement in excess over and above the quantity shown in the invoice, issued a show cause notice for recovering the differential duty. The adjudicating authority came to the conclusion that the respondent had in fact removed the quantity of 37.615 MT of the finished goods without payment of duty. Coming to such a conclusion he confirmed the demand and imposed penalty and ordered for recovery of interest. Aggrieved by such an order, the respondent filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) after considering the contention raised by the respondent set aside the order in original. Hence this appeal by the revenue.
3. Learned SDR submits that the respondent never disclosed the fact that they have removed 37.615 MT of the finished goods during the period April to July 2000. It is his submission that this was unearthed by the audit done by the revenue. He submits that whether the respondent charged for the amount of the value of the cement from the purchaser or not, they are liable to pay the excise duty as the duty is on the manufacture of the goods. It is his submission that the difference in the weight between the weighbridge and the weighment slip, was never got noticed by the authorities otherwise the authorities would have proceeded in the matter in the first stage. He submits that the decision of the Tribunal in the case of Oriental Carbon & Chemicals vs. CCE as reported in 2005 (183) ELT 412 (Tri-Del) will squarely apply in this case.
4. The learned counsel appearing for the respondent puts up the defence that the finding of the learned Commissioner (Appeals) are very clear. It is his submission that the difference noticed is between the automatically bag filling quantity by a electronic machine and the weight is 0.005% which is well within the permissible limit as has been mandated in the Standards of Weights and Measures Act. He submits that, in an identical issue in respect of the very same issue the division bench of the Tribunal in CCE vs. Sagar Cements Ltd. reported in 2005 (180) ELT 196 has held in favour of the assessee and is squarely applicable in this case. He submits that they have filed an affidavit as regards the practice which is being carried out in their factory.
5. Considered the submissions made by both sides and perused the records. The finding of the learned Commissioner (Appeals) in this case are as under:-
8.1 I have gone through entire case records, written/oral submissions of both sides and the Honble CESTATs decision in the case of Oriental Carbon & Chemicals vs. CCE Delhi.
8.2 In the case of Oriental Carbon & Chemicals vs. CCE, Delhi 2005 (183) ELT 412, it is admitted that they were dispatching a slightly excess quantity of carbon black than the quantity in M.Ts for which the customer was being charged. Whereas in the case before me there is no such admission but variation in weight is due to weighment at different weighbridges and the slip prepared manually.
8.3 The allegation in show cause notice are that during 4/2000 to 7/2000 the appellant cleared their excisable goods in excess i.e. over and above the quantity shown in invoice as compared with the weighment slips and as such liable to pay duty with interest and also penalty for such act. The variation in weight difference of 0.005% of total dispatch quantity and difference quantity notice during the period of April 2000 to July 2000, is whether within the permissible limit of fluctuations as per the weighbridge provided by Standards of Weight & Measure Act, 1976 and Rules made thereunder has not been examined by the lower authority. Since, there is a small difference in the weight in terms of percentage of the goods removed and no such difference has ever been noticed prior to this period or after this period, which is mainly due to non-printing of weigh slip by the weighing machine computer, the appellant is entitled to benefit of doubt, in absence of any charge of clandestine removal of goods and evidence thereto.
8.4 The order-in-original is not sustainable for the reason firstly that the difference between the automatically filled quantity and the one arrived on the weigh bridge is 0.005% which is within Weight and Measurement Act/Rules.
8.5 Secondly, even if the little quantity is packed more, the duty being on ad-valorum basis, the ratio of the CESTAT judgement in case of Reckitt & Colman of India Ltd. Vs. CCE, Calcutta 1993 (44) ECR 33 (Tri) squarely applies to the facts of the case in as much as that there is no allegation much less evidence of receipt of any extra amount other than the one raised in invoice. It can be seen from the above reproduced portion that the learned Commissioner (Appeals) has come to a categorical finding that the cement bags when they were filled by automatic filing machine, a weight tag was affixed. The weight of the cement bags loaded on the truck and weight on the weighbridge is more but that it does not mean that the respondent has cleared excess cement in their bags. The respondents had invoiced the actual quantity as per the weight tag attached with the bag and not on the basis of weight at the weighbridge. Further, I find that the revenue has not brought on record whether this excess quantity which has been filled by the respondent was in the knowledge of the respondent i.e. they were knowingly dispatching excess quantity. I find from the affidavit which has been filed by the Senior Officer Accounts, of the respondent categorically states that the weighing is done on an electronic weighing machine which has got a facility of pre-setting the quantity that is filled in each bag. This is what in fact the practice which has been followed from February 2000. They fill each and every bag and attach weight tag to the bag. It is a common knowledge that the weight difference between the two balances is always there.
6. Further I find that the decision relied upon by the SDR in the case of Oriental Carbon (supra) was in the peculiar facts and circumstances of that case wherein it was admitted, that the assessee was despatching slightly excess quantity of the material than the quantity which is mentioned in the invoice, while in this case before me there is no such evidence on record. As such, the decision of the Tribunal in the case of Sagar Cements (supra) will apply. I may read the ratio:-
We find that the lower appellate authority has clearly recorded that as per the provisions of the Standard of Weights and Measures Act, 1976 and the Rules made thereunder, a maximum permissible error of 2% is allowed in weighment of cement, whereas in the case of the goods in dispute, discrepancy was only 1% with reference to the total quantity of cement cleared during the period and by working out the variation as a percentage thereof. She has also noted that the difference between the tare weight and gross weight represents only 1% of the total quantity of cement cleared during the period in dispute by the appellants and that such variations may arise on account of variation between two weighbridges, variation in the method of weighment etc. No satisfactory or acceptable arguments have been raised to dislodge the above findings. We, therefore, see no reason to interfere with the order of the Commissioner (Appeals). We accordingly uphold the same and reject the appeal. It may be noticed from the above reproduced portion, that in that case there was a weight difference of 1 %, still the Tribunal held in favour of the assessee.
7. Respectfully following the decision of the division bench of the Tribunal in Sagar Cements and in the facts and circumstances of the case, I find that the impugned order does not suffer from any infirmity and is upheld.
8. The appeal filed by the revenue is rejected.
(Dictated in Court) M.V. Ravindran Member (Judicial) sr