Custom, Excise & Service Tax Tribunal
Cce, Kanpur vs M/S Ufan Chemicals on 16 December, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. COURT NO. III Excise Appeal No. 169 of 2010 (SM) [Arising out of the Order-in-Appeal No. 336-337/CE/APPL/ KNP/2009 dated 27/11/2009 passed by The Commissioner (Appeals), Customs & Central Excise, Kanpur. ] CCE, Kanpur Appellant Versus M/s Ufan Chemicals Respondent
Appearance Mrs. R. Jagdev, Authorized Representative (SDR) for the appellant. Adjournment request (Shri A.K. Dixit, Advocate) for the respondent. Excise Appeal No. 170 of 2010 (SM) [Arising out of the Order-in-Appeal No. 308/CE/APPL/ KNP/2009 dated 16/11/2009 passed by The Commissioner (Appeals), Customs & Central Excise, Kanpur. ] CCE, Kanpur Appellant Versus M/s Bee Kay Precision (India) Pvt. Ltd. Respondent Appearance Shri P.K. Sharma, Authorized Representative (DR) for the appellant. Shri A.K. Dixit, Advocate for the respondent. For Approval and signature :
Honble Shri Rakesh Kumar, Member (Technical)
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?
CORAM : Honble Shri Rakesh Kumar, Member (Technical) DATE OF HEARING : 16/12/2011.
Order No. ________________ Dated : _____________ Per. Rakesh Kumar :-
Since facts of these appeals filed by the Revenue and issue involved are similar, both the appeals, though the respondents are different, were heard together and are disposed of by a common order.
2. In the case of appeal No. E/169/2010, the respondent M/s Ufan Chemicals are manufacturer of Acid Slurry and Spent Acid chargeable to Central Excise Duty. In course of physical stock verification by the Jurisdictional Central Excise officers on 10/6/08, the officers found shortage of 4.927 M.T. of the finished goods on which the duty involved was Rs. 75,317/-. Shri Manoj Awasthi, Authorized Signatory of the appellant, who was present on the spot, in his statement dated 10/6/08 admitted the shortage and on being asked about the reasons for the same, stated that the shortage was because of clandestine removal of the finished product by someone in his factory without issuing any invoices in his absence. The duty involved on the goods was paid on 3/7/08. On the basis of these facts after issue a show cause notice, the Jurisdictional Assistant Commissioner confirmed the Central Excise duty demand of Rs. 75,317/- and beside this, while penalty of equal amount was imposed on the respondent company under Section 11AC penalty of Rs. 2,000/- was imposed on Shri Manoj Awasthi, respondent company under Rule 26 of the Central Excise Rules. On appeal to Commissioner (Appeals), the Commissioner (Appeals) vide order-in-appeal dated 27/11/09 while upholding the duty demand, set aside the penalties on the respondent company as well as the authorized signatory. Against this order of the Commissioner (Appeals), the department has come in appeal.
3. In the appeal No. E/170/10, the respondent M/s Bee Kay Precision (India) Pvt. Ltd. are the manufacturer used C.R. Coils/Sheets as their inputs for manufacture of their final product and in respect of which Cenvat credit had been taken. On 10/6/08, the Jurisdictional Central Excise officers visited the respondents factory and conducted stock taking of the Cenvat credit availed input and final product and shortage of 15187 Kgs. of Cenvat credit availed input C.R. Coils/Sheets on which Cenvat credit amounting to Rs. 1,05,119/- was involved was found. Shri Devendra Kumar Katiyar, Authorized Signatory of the respondent accepted the shortage and on being asked to explain the reasons of the same, stated that some of his staff in his absence must have cleared the inputs found short without issuing any bill or invoices or without payment of any duty. On the basis of these facts, after issue of show cause notice, the Jurisdictional Assistant Commissioner confirmed the Cenvat credit demand, appropriated the amount already paid by the respondent alongwith interest and imposed penalty of equal amount on the respondent. However, on appeal to Commissioner (Appeals), the penalty on the respondent was set aside. Against this order of the Commissioner (Appeals), the Revenue has filed this appeal.
4. Heard both the sides.
5. Shri P.K. Sharma and Mrs. R. Jagdev, the learned DRs, assailing the impugned orders-in-appeal pleaded that in both the cases not only shortages of finished goods and Cenvat credit availed inputs have been admitted by the authorized representative of the respondent, they have also stated that the goods found short had been removed without payment of duty and without issue of invoices, that these statements by the Authorized Signatory have not been retracted by them, that the shortages are huge and the only explanation for the same would be clandestine removal without payment of duty, which, in fact, is admitted in both the cases, and that in view of this, the findings of the Commissioner (Appeals) that there is no clandestine removal warranting the imposition of penalty under Section 11AC are not correct. They emphasized that the quantum of shortage and the admission of the Authorized Signatory in both the cases that the goods found short had been removed without payment of duty is clear evidence of clandestine removal and, as such, no other evidence in this regard is required for invoking the provisions of under Section 11AC. The learned DR also cited the judgment of the Tribunal in the case of CCE, Nashik vs. Sunita Pipes Pvt. Ltd. reported in 2010 (262) E.L.T. 1031 (Tri. Mumbai) in support of their contention.
6. Shri A.K. Dixit, Advocate, the learned Counsel for the respondents, pleaded that merely from the shortage of Cenvat credit availed inputs or finished goods, even if admitted, it cannot be concluded that the goods had been clandestinely removed, and that the review authorization signed by the Committee of Commissioners is not valid as the second Commissioner has not put the date below his signature. He, therefore, pleaded that there is no infirmity in the impugned order and, as such, even the appeals filed by the Revenue are not valid appeals.
7. I have carefully considered the submissions from both the sides and perused the records.
8. Coming to the preliminary objection raised by the learned Counsel for the respondent, I find that in both the cases, the appeals have been filed well within period of three months from the date of receipt of the order and, therefore, it cannot be said that the decision to file appeal against the Commissioner (Appeals)s order was not taken by the Committee of Commissioners within the prescribed limitation period. As regards, the plea of the respondent that since the other Commissioner has not put date below his signature and, therefore, the decision was not taken by the Committee of Commissioners sitting together, in my view, this is not a valid objection as the decision of the Committee can be by rotation also and the proposal for filing appeal can be examined and signed by the Commissioners at different time. Moreover, just because the other Commissioner has not put the date below his signatures, it cannot be concluded that the decision was not taken by both the Commissioners together while sitting as a Committee.
9. As regards the merits of the case, I find that in both the cases, the shortages are huge which require valid explanation, but the respondents in both the cases have not only admitted the shortages, but have clearly stated that the shortages were on account of removal of goods without payment of duty and without issue of the invoices which obviously is a clear admission of the clandestine removal. These admissions of the Authorized Signatory of the respondents have not been retracted by them. In view of these facts, the findings of the Commissioner (Appeals) that the Revenue has not produced any evidence to prove the allegation of clandestine removal is not correct. Since in this case, the elements for imposition of penalty under Section 11AC are present, the same would be warranted and, as such, the Commissioner (Appeals)s order setting aside penalty is not correct. In view of this, the order of Commissioner (Appeals) setting aside the penalty is set aside and in this regard, the order passed by the original Adjudicating Authority is restored. The Revenues appeals are allowed.
(Dictated and pronounced in open court.) (Rakesh Kumar) Member (Technical) PK ??
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