Custom, Excise & Service Tax Tribunal
Cce, Kanpur vs M/S Jagdish Rolling Works on 25 October, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV Excise Appeal No. 400 of 2007 (SM) [Arising out of the Order-in-Appeal No. 609/CE/APPL/KNP/2006 dated 30/11/2006 passed by The Commissioner (Appeals), Customs & Central Excise, Kanpur.] 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? CCE, Kanpur Appellant Versus M/s Jagdish Rolling Works Respondent
Appearance Shri B.B. Sharma, Authorized Representative (DR) for the appellant.
None - for the Respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) DATE OF HEARING : 25/10/2013.
Final Order No. 58144/2013 Dated : 25/10/2013 Per. Rakesh Kumar :-
The respondent are manufacturers of MS Angles from Mild Steel ingots. Their factory was visited by the Central Excise officers on 8/11/02 when the stock of Cenvat credit availed raw material MS ingots and the finished goods MS Angles was checked. In the stock of raw material, there was shortage of 16.11 M.T. involving Cenvat credit of Rs. 25,260/- and in the stock of finished goods there was shortage of 25.83 M.T. involving duty of Rs. 30,450/-. The stock taking had been done in presence of Shri Brijendra Srivastava, Authorised Signatory and he in his statement dated 11/11/02 accepted the shortage, but could not give any explanation for the same. The duty/Cenvat credit involved on the inputs and finished goods found short Rs. 55,710/- was debited in the RG 23A Pt. II account. Subsequently, after issue of show cause notice the Assistant Commissioner vide order-in-original dated 02/12/05 confirmed the above-mentioned demand, but did not impose any penalty on the respondent under Section 11AC. On review appeal being filed to Commissioner (Appeals) by the Department for imposition of penalty, the same was dismissed by the Commissioner (Appeals) vide order-in-appeal dated 30/11/06. The stand of the Assistant Commissioner in the order-in-original as well as of Commissioner (Appeals) in the order-in-appeal was that since the duty had been deposited before the issue of show cause notice, imposition of penalty under Section 11AC is not called for in view of judgment of Honble Bombay High Court in the case of Gaurav Mercantile Ltd. 2005 (190) E.L.T. 11 (Bom.). Against this order of the Commissioner (Appeals), the Revenue is in appeal.
2. None appeared for the respondent though a notice for hearing has been sent to them. In view of this, so far as the respondent are concerned, this matter is decided ex-parte.
3. Heard Shri B.B. Sharma, learned DR, who assailed the impugned order by reiterating the grounds of appeal and pleaded that the shortage of 16.11 M.T. of MS Ingots and shortage of 25.83 M.T. of Angles is huge, that this shortage stands accepted, that no explanation, whatsoever, has been given by the respondent for the shortage, from which the only the conclusion which can be drawn is that the goods found short must have been removed clandestinely, that since the elements for imposition of penalty under Section 11AC are present, in view of the Apex Court judgment in the case of Union of India vs. Rajasthan Spinning and Weaving Mills reported in 2009 (238) E.L.T. 3 (S.C.), penalty has to be imposed under Section 11AC has to be imposed irrespective of whether the duty had been paid before the issue of show cause notice and that reason for upholding the non-imposition of penalty in the Commissioner (Appeals)s order is not correct.
4. I have considered the submissions of learned DR and have gone through the memorandum of appeal. The shortage of inputs shortage of 16.11 M.T. of MS Ingots and shortage of 25.83 M.T. of Angles is huge for which the respondent have not given any satisfactory explanation and, therefore, it has to be presumed that the goods found short had been removed clandestinely without payment of duty. In view of this, penalty under Section 11AC equal to the duty demand should have been imposed and the fact that the duty had been paid before the issue of show cause notice is not relevant for this purpose, in view of judgment of Apex Court in the case of Union of India vs. Rajasthan Spinning & Weaving Mills (supra). The judgment which have been relied upon by the Commissioner (Appeals) is no longer a good law. In view of this, the impugned order upholding the non-imposition of penalty is set aside and penalty of an amount equal to the duty/Cenvat credit demand confirmed under Section 11AC is imposed on the respondent. The Revenues appeal is allowed.
(Dictated and pronounced in the open court.) (Rakesh Kumar) Member (Technical) PK ??
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