Custom, Excise & Service Tax Tribunal
Cce, Kanpur vs M/S Jyoti Capsules on 10 January, 2012
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
Court No.III
E/Appeal No.872/2008-SM
(Arising out of order in appeal No. 27/CE/Appl/KNP/08 dated 29.1.08 passed by the Commissioner of Customs & Central Excise(Appeals), Kanpur)
Date of Hearing:10.1.2012
For Approval and signature:
Honble Mr.Mathew John, Technical Member
_________________________________________________
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 would 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
Department Authorities?
CCE, Kanpur Appellants
Vs
M/s Jyoti Capsules Respondent
Appeared for the Appellant: Shri S.K. Panda, Jt CDR
Appeared for the Respondent: Shri S. Yadava, Advocate
Coram: Honble Shri Mathew John, Member (Technical)
ORDER
Per Mathew John:
The Respondents are manufacturers of PP Medicines. The Revenue officers visited their factory on 17.5.06. They found that stock of one of the items namely Composite Solvent ( Hexane) was short by 2600 Litres. They also found stock of 589 boxes of medicines which had expired. Further, there was some packing material lying in the factory which could not be used by them because they had stopped manufacturing the medicines for which it was to be used. Revenue officers pointed out these issues to the respondents during the visit. Thereupon, the respondents immediately paid Rs. 40,770/- along with interest as per details below:-
Sl No. Description of goods Shortages found against the recorded balances Value BED(Rs) Ed. Cess (Rs) Total Duty
1.
Raw Material:-
Composite Solvent (Solvent IS (n Hexane) 2600 79350 12696 254 12950
2. Finished Goods:- Expired Goods 589 boxes N.A. Reversal of credit 1789/-
-
1789/-
3. Packing Material:
Panimun Bioral Not specified N.A. Reversal of credit 26031/-
-
26031/-
2. The Revenue was of the view that a penalty should also have been imposed on the respondents though the penalty was not imposed by the adjudicating authority. On appeal filed against the adjudication order, the Commissioner (Appeals) also endorsed the view that there was no intention on the part of respondents to evade duty. Aggrieved by the order of the Commissioner (Appeals), Revenue has filed this appeal.
3. The Counsel for the appellants submits that the raw material involved was received in the factory but was found to be of sub-standard quality and for this reason, it was returned to the manufacturer of solvent. But there was an error in not reversing the credit immediately. In the case of finished goods, the contention is that the goods were not cleared from the factory and duty was to be paid when it was removed and they had no intention to evade duty to be paid. In the case of packing material also, he submits that the material was not useful, but they had not removed from the factory and liability to reverse credit would arise only if goods were removed. But as soon as irregularity was pointed out, they had reversed the cenvat credit taken.
4. The AR for Revenue submits that in the case of raw material found short, the explanation given is not proper and the irregularity would not have been detected if the verification was not conducted by the department and therefore, the respondent should be asked to pay penalty. In respect of the other two items also, he pleads that situation is similar.
5. Considered arguments of both sides. I find that both the adjudicating authority and the first appellate authority have accepted the explanation given in respect of shortage of the impugned raw material. The Revenue has not produced any evidence to disprove the submission of the assessee. If the submission made is correct, intention to evade payment of duty was not there. In case of the other two items, I am clearly of the view that there is no intention to evade payment of duty. Having regard to the aforesaid facts and circumstances and the findings of the adjudicating authority and first appellate authority, I uphold the impugned order. The appeal filed by the Revenue is rejected.
(Order dictated and pronounced in the open Court.) (MATHEW JOHN) Member (Technical) MPS* 4