Custom, Excise & Service Tax Tribunal
Ashok Dhanuka vs Thane I on 1 August, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NOS: E/1316 & 1317/2012
[Arising out of Order-in- Appeal No: BR/75 & 76/Th-I/2012 dated 6th July 2012 passed by the Commissioner of Central Excise (Appeals), Mumbai Zone I.]
For approval and signature:
Honble Shri C J Mathew, Member (Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of 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?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Sun Steel
Ashok Dhanuka
Appellants
Vs
Commissioner of Central Excise
Thane I
Respondent
Appearance:
Shri Anil Mishra, Advocate for the appellants Shri Sanjay Hasija, Superintendent (AR) for the respondent CORAM:
Honble Shri C J Mathew, Member (Technical) Date of hearing: 01/08/2016 Date of decision: 30/11/2016 ORDER NO: ____________________________ The impugned order-in- appeal no: BR/75 & 76/Th-I/2012 dated 6th July 2012 passed by the Commissioner of Central Excise (Appeals), Mumbai Zone I pertains to upholding of the order of the lower authority which appropriated `2,14,797/- paid by the appellant on 95MTs of MS scrap found short on physical verification of their factory stock on 6th March 2010 besides penalties imposed under rule 15 of the CENVAT Credit Rules and on the Manager under rule 26 of the Central Excise Rules.
2. It would appear that during the said visit shortage was noticed on which duty liability was made good by debiting the PLA as well as payment through CENVAT credit account. It is the contention of the appellant that the estimated shortage had not been ascertained in a scientific or verifiable manner but on eye estimate which did not take into account the quantity of material that were being used in the production process. It is also contended that the scrap and scull are poured into the furnace and quantity entered only on an estimate basis.
3. Learned Counsel for the appellant relies upon the decisions of the Tribunal in Geekay Wires Pvt Ltd v. Commissioner of Central Excise, Hyderabad [2006 (200) ELT 86 Tri. (Tri._Bang.)]; Micro Forge (I) Pvt Ltd v. Commissioner of Central Excise [2004 (169) ELT 251 (Tri.Mumbai); Continental Containers v. Commissioner of Central Excise, Jaipur 2005 (185) ELT 311 (Tri.-Del.)] and Vishvaman Industries v. Commissioner of Central Excise, Delhi [2011 (127) ELT 155 (Tri.-Del.)] which laid down the principle that the exact quantification is a necessary requirement for demand of duty in the event of allegation of shortage of stock.
4. On the other hand, Learned Authorised Representative relies upon the decision of the Honble High Court of Madras in Goyal Ispat v. CESTAT, Chennai [2015 (324) ELT 392 (Mad.)] which has held that:
9.?In the absence of any such material, there is no possibility for this Court to consider this issue at all. The next question is whether stock taking conducted on eye estimation is fatal to the case of the Department. We find that the order of the Tribunal is not on the basis of visual inspection, but based on mahazar records recording the shortage of goods, which has been done in the presence of the independent witnesses and such shortage was supported by the unretracted statement of Mr. Balaji, Manager of the assessee company. In this view of the matter, the non-recording of the correct quantity of goods in the statutory record, viz., RG.1 register maintained by the assessee establishes the case for demand of duty, more so in a case of statement accepting Central Excise violation. and also on the decision of the Honble High Court of Bombay in Rathi Re-Rolling Mills v. Commissioner of Central Excise [2015 (327) ELT 18 (Bom.)].
5. In view of the decision of the Honble High Court in Goyal Ispat (supra), the appeals are devoid of merits and is accordingly dismissed.
(Pronounced in Court on 30/11/2016) (C J Mathew) Member (Technical) */as 4 4