Customs, Excise and Gold Tribunal - Delhi
Flex Industries Ltd. vs Commissioner Of C. Ex. on 10 September, 2002
Equivalent citations: 2003(151)ELT198(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. This appeal has been filed by the appellants against the impugned Order-in-Original dated 7-2-2002 passed the Commissioner (Appeals) vide which he had affirmed the Order-in-original dated 25-6-99 of the Additional Commissioner.
2. The facts are not much in dispute. The factory premises of the appellants located at Noida was visited by the Officers of the Central Excise . on 19-1-98 and they conducted physical verification of the stock of inputs as well as finished goods lying in the factory. As a result of that verification/ inputs involving duty of Rs. 29,780,22 were found short, while finished goods (BOPP films) weighing 15387.800 Kgs. valued at Rs. 12,31,0247- were found in excess of the recorded stock. The appellants however, debited the amount of Rs. 29,780/- involved on the inputs found short vide PLA entry No. 297, dated 20-1-98. The excess stock of finished products was seized by the officers. The appellants were served with a show cause notice vide which duty demand of Rs. 29,780/- on the inputs found short and removed without payment of duty, was demanded and confiscation of the goods found excess was also proposed besides imposition of penalty under Rule 173Q.
3. Since the appellants did not dispute the shortage of inputs as well as excess of the finished goods as detected by the officers of the central excise, at the time of the physical verification, they debited an amount of Rs. 29,780/- through PLA on 20-1-98 which was involved on the inputs. Regarding excess quantity of the goods found in their stock than what was entered by them in the record, they alleged that out of the total stock of 120848.21 Kgs., the variation of 15387.8 Kgs. was negligible and should be ignored. The Additional Commissioner, however, confirmed the demand on the inputs found short and ordered the confiscation of the finished goods found excess. The Commissioner also appropriated the amount of Rs. 3,08,000/- towards redemption fine on the goods from the security furnished by the appellants while getting the provisional release of the goods and further imposed penalty of Rs. 4,00,000/- under Rule 173Q of the Rules, on the appellants.
4. The only contention raised on behalf of the appellants by their Representative before us is that for non-accountal of the goods in the RG-1, no penalty under Rule 173Q could be imposed as there was no intention on the part of the appellants to remove the goods found excess in stock, without payment of duty. Therefore, the confiscation of the excess goods could not be legally made and no penalty could also be imposed. He has relied upon the ratio of law laid down in Bhillai Conductors (P) Ltd. v. CCE - 2000 (125) E.L.T. 781, wherein it has been observed that the confiscation and penalty in case of non-accountal in RG-1, is not sustainable, in the absence of evidence and that the non-accountal was with an intention to evade payment of duty. The other cases referred by the Representative laying down this very proposition of law are; United Phosphorus Limited v. CCE, Surat-II - 2001 (133) E.L.T. 691, Empire fasteners v. CCE, Chandigarh - 2001 (135) E.L.T. 849, CCE, Jaipur v. Rose Metal (P) Ltd. - 2001 (133) E.L.T. 217, Caprihans India Ltd. v. CCE, Bombay-Ill -1995 (78) E.L.T. 480, Woodcrafts v. CCE, Shillong - 1999 (108) E.L.T. 398, Prew Industries Ltd. v. CCE, Delhi [2002 (142) E.L.T. 583 (T) - 2002 (50) RLT 410] and Pepsi Poods v. CCE, Chandigarh [2002 (139) E.L.T. 658 (T) = 2001 (47) RLT 925].
5. On the other hand, the learned SDR has reiterated the correctness of the impugned order.
6. We have heard both sides and gone through the record.
7. There is no dispute regarding the proposition of law laid down in the above referred cases that in the absence of any evidence to prove the intention of the assessee to evade payment of duty, the goods found excess in his stock, cannot be ordered to be confiscated, as Rule 173Q would not be attracted for confiscation of the goods and imposition of penalty thereunder on him. But each case has to be decided keeping in view its facts and circumstances. It would not be proper to say that wherever and whenever non-accountal of the goods had been deducted in the factory premises of the assessee, he should be only proceeded against under Rule 226 and not under Rule 173Q, even if the attending circumstances made it quite clear that he had an intention to evade excise duty. Now in the instant case, admittedly some inputs valued at Rs. 1,48,523.49 involving duty of Rs. 29,780/- were found short in the stock of the appellants. They readily admitted this shortage and made debit entry of the duty-amount in their PLA. They also did not dispute the quantity of excess finished goods of 15387.8 Kgs. (BOPP film) valued at Rs. 12,31,024/-. It is not their case that this was the production of only one day and due to the absence of the concerned clerk maintaining RG-1 register or due to some other unavoidable cause, could not be entered in the RG-1 register. They had only pleaded that this being a negligible quantity; deserved to be ignored. It appears in their view if the quantity is too large, only then non-accountal of the goods should be taken note of by the Revenue. But keeping in view the conduct of the appellants as the inputs were found short and they admitted the shortage of the same and even debited the duty amount and finished goods were also found excess in their stock without any plausible explanation, it would be very proper and warranted by law, to infer that their intention was clearly to evade the payment of duty and to clear the excess goods on finding proper time and opportunity, without paying any duty. The shortage of inputs could lead to only one conclusion that they had removed the goods without payment of duty and that is why they readily accepted their liability and debited the duty amount.
8. Therefore, in the light of what has been discussed above, in our view, the provisions of Rule 173Q has been rightly invoked against the appellants for non-accountal of the inputs as well as finished goods in the statutory record. However, since the appellants had already debited the duty amount involved on the inputs found short, we reduce the redemption fine in respect of the confiscation of the goods to Rs. 1,50,000/- and penalty to Rs. 1,00,000/-.
9. Except for this modification the redemption fine and penalty, the impugned order of the Commissioner (Appeals) is upheld. The appeal of the appellants accordingly stands disposed of.