Custom, Excise & Service Tax Tribunal
M/S.Jalan Concast Ltd vs Cce, Allahabad on 6 August, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-SM
Excise Appeal No. E/1106/2010 -SM
[Arising out of Order-in-Appeal No.68/CE/ALLD/2010 dated 26.02.2010 passed by the Commissioner (Appeals), Central Excise, Allahabad].
M/s.Jalan Concast Ltd. Appellant
Vs.
CCE, Allahabad Respondent
Present for the Appellant : Shri.Mayank Garg, Advocate Present for the Respondent:Smt. Shweta Bector, DR Coram: HONBLE MR. D.N. PANDA, JUDICIAL MEMBER Date of Hearing/Decision:06.08.2012 ORDER NO. _______________ DATED:________ PER: D.N.PANDA Ld. Counsel submits that there was no weighment of entire stock was done by investigation made on 16.10.07. Physical inventory resulted with 19.632 MT shortage of MS ingots. This was an eye estimation by merely weighing 55, 50, 60 and 45 ingots loaded in a tractor trolley to calculate average weight of the goods. Such average formula was erroneously adopted to find out the alleged shortage of stock.
2. It was also submission of appellant that if at all Tribunal comes to a conclusion that duty shall be payable there may be concession granted in respect of penalty.
3. Ld. DR on the other hand supports the order of the authorities blow.
4. Heard both sides and perused the record. It is not case of presumptive evasion. Investigation was of the reasonable belief that clandestine removal was made when there was deficiency of the goods found during physical inventory. No doubt representative sample was taken and weighment thereof was made to arrive at the shortage. When investigation calculated shortage of 19.63 MT of MS ingots based on the actual weighment of the representative sample, the explanation that was furnished by Shri Om Prakash Jalan, Director of the appellant was non-verification of stock of MS ingots by the appellant for a long time, which gave rise to the shortage. But the shortage detected by investigation remained unrefuted.
5. Once the shortage of goods is found by physical inventory, the possible inference is clandestine removal, since the appellant did not make any attempt to reconcile its discrepancy while it is a public limited company. If there was a financiary was against inventory by way of cash credit assistance such financiary was not been provided with correct inventory figures. So also the status with income-tax authorities. If they have relied on the balance sheet and the profit and loss account resulting in the operation result of the financial year, that was the outcome of distorted inventory valuation by appellant. Therefore there is no scope to hold in favour of the appellant in so far as duty and interest aspect is concerned. Accordingly levy of duty and interest is confirmed.
6. It is unfortunate that the appellate authority although brought to appellant to the jaws of penalty it did not probe the matter further to establish whether ingredient of section 11AC of Central Excise ct 1944 exist. Therefore, prayer of ld. Counsel to grant concession in penalty cannot be denied. Accordingly, dismissing the appeal the appellant is directed to deposit 25% of the duty element within 30 days of receipt of the order, otherwise entire penalty shall be recoverable.
[Dictated & Pronounced in the open Court].
(D.N.PANDA) JUDICIAL MEMBER Anita ??
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