Custom, Excise & Service Tax Tribunal
M/S. Nitin Ispat (P) Ltd vs Commissioner Of Central Excise on 27 March, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. 2646-2647 of 2011- [SM]
[Arising out of Order-In-Appeal No. 189/LKO /2011 dated 16.8.2011 and 191/CE/LKO /2011 dated 17.8.2011 both passed by Commissioner (Appeals), Customs, Central Excise and Service Tax, Lucknow ]
For approval and signature:
Honble Ms. Archana Wadhwa, 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?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
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
M/s. Nitin Ispat (P) Ltd. Appellants
Vs.
Commissioner of Central Excise Respondent,
Lucknow Appearance:
Shri Amit Awasthi, Advocate for the Appellants Shri M S Negi, AR for the Respondent Date of Hearing: 14.02.2014 Date of decision: 27.03.2014 ORDER NO. FO/ A 51225-51226 /2014-ST(SM) Per Archana Wadhwa:
Both the appeals are being disposed of by a common order as the issue involved in both of them is identical, though they arise out of two different orders passed by Commissioner (Appeals).
2. After hearing both sides, duly represented by Shri Amit Awasthi, learned advocate appearing for the appellant and Shri M S Negi, learned DR appearing for the Revenue, I find that the appellants are engaged in the manufacture of ingots. Their factory was visited by the Central Excise officers on 19.7.09, when the physical stock taking of their final products was undertaken and 103.48 MT of MS ingots were found in excess than the recorded balance. The said goods totally valued Rs.21,31,688/-, involved duty of Rs.1,75,651/-. On adjudication, the lower authorities ordered confiscation of the said excess found goods with an option to redeem the same on payment of redemption fine of Rs. One lakh and also imposed penalty of Rs. 1,75,651/-. The said facts are involved in Appeal No. E/2646/2011-Ex(SM).
3. The appellants factory was again visited by the officers on on 27.1.2010 and 54.562 MT of ingots totally valued at Rs.10,91,240/-, involving duty of Rs.89,918/- were found in excess than the recorded balance. The same were seized by the officers. On adjudication, the lower authorities confiscated the same with an option to redeem the same on payment of redemption fine of Rs.20 lakh and imposed penalty of Rs. 89,918/-.
Hence the present two appeals by the appellant.
4. The main ground of defence by the appellant is that when their factory was visited by the officers on 19.7.09, there was already a break down in the factory due to fault in the transformers which fact is not being disputed by the Revenue. Further, they have contended that the entire physical verification was on the basis of eye estimation inasmuch as no investigations were made. The physical verification was conducted in their factory from 19.7.09 to 23.7.09 and only one panchnama was prepared. After observing that the panchnama witnesses were called for and were available, there is no detailing of the fact that as to whether panchas remained in the factory right from 19.7.09 to 23.7.09 without having any track as to which particular date physical weighment was done. They have also contended that though the weighment slips mention the truck numbers but there is no mention of use of tractor or trolley for the weighment. The statement of authorised representative nowhere admits that excess found goods were meant for clandestine removal.
Similar arguments stand advanced in the other appeal.
5. After hearing both sides, I find that appellants are mainly objecting to recording of panchnama on the ground that it is not practical to weigh the goods without creating the inventory. Inasmuch as there was quite huge stock of ingots available in the factory. I find force in the above contention of the learned advocate. In the absence of inventory, it is neither possible nor practical to weigh such huge quantum of final product. As such, there is every possibility of occurrence of an error in the physical verification of stock. Otherwise also, I find that there is virtually no evidence on record that such excess stock was not entered in the records with any malafide to clear the same without payment of duty. There is no inculpatory statement of any authorised representative of the appellant.
6. In the absence of any evidence to that effect, I fully agree with the learned advocate that as per declaration of law by various decisions of the Tribunal, confiscation of excess found goods is neither justified nor warranted. Reference can be made to majority decisions in the case of Bhillai Conductors (P) Ltd. vs. CCE, Raipur [ 2000 (125) ELT 781 (Tri)] as also to Tribunals decision in the case of A Kumar industries vs. CCE Daman, Vapi [ 2010 (261) ELT 486 (Tri-Ahmd)]. It stands held in the said decision that a simple failure of non-accounting of goods in the RG 1 register do not invite confiscation of the same or imposition of penalty unless there is evidence to show that goods were meant for clandestine removal.
7. By following the above decision, I set aside the impugned order and allow both the appeals with consequential relief to the appellants.
(Pronounced in the open court on )
( Archana Wadhwa ) Member(Judicial)
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