Customs, Excise and Gold Tribunal - Delhi
Cce vs Surya Roshni Ltd. on 18 February, 2003
Equivalent citations: 2003(88)ECC73, 2003(156)ELT375(TRI-DEL)
JUDGMENT P.S. Bajaj, Member (J)
1. In this appeal, the Revenue has questioned the validity of the impugned Order-in-Appeal dated 22.8.2001 vide which the Commissioner (Appeals) has reversed the Order-in-Original of the Joint Commissioner who confirmed the duty demand of Rs. 8,80,799 with equal amount of penalty under Rule 11-AC of the Act and also imposed penalty of Rs. 1 lakh under Rule 173-Q of the Rules.
2. The respondents are engaged in the manufacture of Electric Bulbs, Tube Lights and Auto Halogen lamps. On scrutiny of the balance sheet of the respondents' company for the financial year 1995-96 and 1996-97 in respect of all these products, shortage of 54,601 auto halogen lamps was detected for the period 1995-96, while for the period 1996-97, the shortage found was of 1,08,510 lamps. Accordingly, show cause notice was served on the appellants vide which duty demand on the finished goods found short was raised and penalty was also proposed to be imposed on them. The respondents contested the correctness of the show cause notice by alleging that the balance sheet was only a commercial accounting document and had nothing to do with the statutory records required to be maintained under the Central Excise Law. They also sought concession of the breakage of capsules which according to them were not accounted in the statutory records. The adjudicating authority, however, did not accept the version of the respondents and confirmed the duty demand with penalties as detailed above. The Commissioner (Appeals) had reversed that order of the adjudicating authority through the impugned order.
3. Shri Damodar Tiwari, representative of the respondents, is present. He requests for adjournment on the ground that their consultant has not come, but I do not find any sufficient ground to allow the request. I have heard him and the learned SDR and gone through the record. The hare perusal of the Order-in-Original shows that the respondents themselves did not dispute the shortage of the finished goods i.e. Halogen Lamps, during the course of investigation. The authorized signatory of the respondents, namely, Shri Prakash Kumar, in his statement fairly conceded this fact. The plea taken up by the respondents is that, the balance sheet was their private document and had nothing to do with the statutory record which they were required to maintain under the Central Excise Law and that there was no discrepancy in that record. In my view, this plea has been wrongly accepted by the Commissioner (Appeals). The bare perusal of the impugned order shows that he has over-looked the confessional statement of the authorized signatory of the respondents admitting the shortage of the finished goods. True that the respondents deserved allowance for the breakage of the capsules, as well as in respect of the defective capsules, but to what extent, was to be explained by them and not by the Department. Moreover, the findings of the adjudicating authority that the breakage stage was prior to the accounting of the finished products and had nothing to do with the shortage of the final products found in the factory premises of the respondents deserves to be accepted. It was for the respondents to explain the shortage and the circumstances under which the balance sheet was prepared by them. They are bound by the entries made therein. This aspect has been also completely ignored by the Commissioner (Appeals).
4. The Commissioner (Appeals) has also held the demand to be time-barred by observing that the show cause notice was issued one year after furnishing of the entire information by the respondents to the Department. Here again he has faulted in ignoring the ratio of the lay laid down by the full Bench of the Tribunal in the case Nizam Sugar Factory v. CCE, Hyderabad, 1999 (114) ELT 429 (T). Moreover, he has also failed to refer to any document through which the entire information regarding the shortage in the final product was given by the respondents to the Department. The findings of the learned Commissioner (Appeals) are quite vague and without any basis regarding the time-bar claim of the Department.
5. The learned Commissioner (Appeals) has also set aside wrongly the entire penalty under Section 11-AC of the Act and under Rule 173-Q of the Rules. The Commissioner (Appeals) has observed that the major portion of the demand was before the enactment of the provisions of Section 11-AC, but had failed to work out the details in that regard. Even if a small portion of the duty period was covered by the provisions of the said Section, still the penalty could be imposed proportionately. Similarly, for setting aside the penalty under Rule 173-Q of the Rules, the Commissioner (Appeals) has simply observed that there was no violation of the rules. Here again he failed to record any reasons. In fact, no cogent and convincing reasons have been recorded by the Commissioner (Appeals) in his entire impugned order for reversing the Order-in-Original of the adjudicating authority which is quite detailed one and each and every aspect of the case and the pleas of the respondents had been dealt with at length.
6. From the entries made in the balance sheet which did not tally with that of statutory record and the statement of the representative of the respondents, it is evident that they themselves admitted the shortage of the finished goods in question. The Commissioner (Appeals), in my view, had grieviously erred in absolving the respondents of their duty and penalty liability. From the material brought on record, I do not find any sufficient ground to disagree with the reasons recorded by the adjudicating authority in the order-in-original for confirming duty demand and imposing penalty on the respondents. His order deserves to be restored, except for the modification in the quantum of penalty imposed under Section 11-AC of the Act as no penalty for the period prior to the enactment of this Section could be imposed. The penalty under this Section is reduced to Rs. Two lakhs. However, penalty under Section 173-Q of the Rules is maintained.
7. In view of the discussion made above, the impugned order of the Commissioner (Appeals) is set aside and that of the Order-in-original of the adjudicating authority is restored with modification in the penalty only under Section 11-AC, as observed above. The appeal of the Revenue accordingly stands disposed of.