Custom, Excise & Service Tax Tribunal
C.C.E., Kanpur vs M/S. Juhi Alloys Ltd on 7 April, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. 1216 of 2008-SM(BR)
[Arising out of Order-in-Appeal No. 173/CE/APPL/KNP/2008 dated 24.4.2008 passed by the Commissioner of Central Excise (Appeals), Kanpur]
For approval and signature:
Hon'ble Mr. M. Veeraiyan, 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 should 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 :
Departmental authorities?
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C.C.E., Kanpur Appellants
Vs.
M/s. Juhi Alloys Ltd. . Respondents
Appearance:
Shri R.K. Saini, DR for the Appellants
None for the Respondent
Date of Hearing/decision : 7.4.2010
ORAL ORDER NO . ________________________
Per M. Veeraiyan:
This is an appeal by the Department against the order of the Commissioner (Appeals) No. 173/CE/APPL/KNP/2008 dated 24.4.2008.
2. None appears for the respondent inspite of notice. Heard the learned DR for the Department.
3. When the officers visited the factory premises on 22.12.05 and conducted stock verification, they found a shortage of 53.058 MT of steel bars against the recorded stock valued Rs.7,79,953/- involving duty amount of Rs.1,27,288/-. The party paid the duty involved on 4.1.06. The reason given for the shortage was that they entered the quantity of finished goods on the basis of consumption of raw material in the manufacturing process whereas the finished goods were cleared from the factory on actual weight basis. The original authority apart from confirming the demand of duty imposed equal amount of penalty under Section 11AC read with Rule 25 of the Central Excise Rules, 2002. Commissioner (Appeals) set aside the penalty so imposed. Hence, the Department is in appeal.
4. Learned DR reiterates the findings and reasoning of the original authority and the grounds of appeal.
5. I have carefully considered the submissions and perused the records. It is noticed that huge shortage of steel bar was noticed and the reasoning given was that they entered the quantity of finished goods on the basis of consumption of raw material whereas the finished goods cleared from the factory were on actual basis which is not convincing. They admitted the shortage and paid the duty involved. The duty liability was not disputed before the original authority and the Commissioner (Appeals). The respondents were under obligation to account for the disposal of goods recorded in the production records and failure to do so attracts the penal provisions under Rule 25(1)(b) of the Central Excise Rules, 2002. However, in the absence of any corroboratory evidence, the finding of the original authority that the goods have been clandestinely removed cannot be upheld. In view of the above, the order of the Commissioner (Appeals) setting aside the penalty is set aside and order of the original authority in this regard is restored. While restoring the order of the original authority, the penalty imposed is converted as a penalty under Rule 25 of Central Excise Rules and the same is reduced to Rs.5,000/- (Rupees Five thousands only) from Rs. 1,27,288/-.
6. The appeal is partly allowed as above.
( M. Veeraiyan ) Member(Technical) ss 3