Custom, Excise & Service Tax Tribunal
Cce, Meerut-I vs M/S. Tayal Steel Pvt. Ltd on 9 February, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing:09.02.11
Date of decision:09.02.11
Excise Appeal No.1228 of 2008 &
E/CO/271 of 2008-SM (BR)
[Arising out of Order-in-Appeal No.45-CE/MRT-I/08 dated 28.02.2008 passed by the Commissioner of Central Excise (Appeals), Central Excise, Meerut-I].
CCE, Meerut-I Appellant
Vs.
M/s. Tayal Steel Pvt. Ltd. Respondent
For approval and signature:
Honble Shri Rakesh Kumar, Member (Technical) ,,,
1. Whether Press Reporters may be allowed to see 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?
Appearance: Rep. by Shri Krishna Pratap Singh, Advocate for the appellants.
Rep. by none for the respondent.
CORAM: Honble Shri Rakesh Kumar, Member (Technical) Order No/Dated: 9.2.2011 Per Rakesh Kumar At the time of the officers visit to the respondents factory on 29.06.2005, the stock of finished goods of M.S. Ingots was determined by ascertaining the average weight per ingot by actual weighment of 10 M.S. Ingots and thereafter by multiplying the average weight by the number of ingots found. On this basis, the stock of M.S. Ingots worked out to 70.705 M.T., while as per the RG-I Register, the stock was supposed to be 81.075 M.T and as such there was shortage of 10.370 M.T. involving central excise duty of Rs.27,755/-. The respondent pleaded that the shortage may be due to mistake in the counting of ingots by illiterate labourer. They, however, paid the duty on the ingots found short.
1.1 It was found that they had taken cenvat credit of additional customs duty of Rs.41,461/- on the basis of photocopy of the bill of entry dated 9.4.2005 which was not a valid document for cenvat credit as there was no evidence that the original copy had been lost in transit. The respondent reversed the cenvat credit.
1.2 Subsequently after issue of the show cause notice, the Asstt. Commissioner vide order-in-original dated 27.12.2006 confirmed the duty demand on the goods found short and also the cenvat credit demand along with interest and imposed penalty of Rs.41,461/- under Section 11 AC and another penalty of Rs.10,000/- each under Rule 25 of the Central Excise Rules, 2002 and Rule 15 of the Cenvat Credit Rules, 2004. The amount already deposited was appropriated. On appeal to the Commissioner (Appeals), the Commissioner (Appeals) vide order in appeal dated 28.2.2008 set aside the Assistant Commissioners order. It is against this order of the Commissioner (Appeals) that the department has come in appeal. The respondent have also filed a cross objection in respect of the Revenues appeal.
2. Though notice of hearing had been sent to the respondent well in time and has been acknowledged, today when this matter was called, none appeared for hearing. In view of this sofar as the respondents are concerned the matter is being decided ex parte.
3. Heard the learned DR.
4. Shri K.P.Singh, ld. DR pleaded that sofar as the issue of the availment of credit on photocopy of the bill of entry is concerned, the photocopy on which the credit has been taken is not certified copy and there is no evidence of loss of the original copy of the bill of entry, that in view of these circumstances, the Cenvat credit is not available to the respondent and in this regard, he relied upon the judgements of the Tribunal in the case of Vardhman Spg. & Gen. Mills Ltd. Vs. CCE reported in 2002 (144) ELT 570 (Tribunal-Delhi) and also in the case of Ceat Limited Vs. CCE, Mumbai-III reported in 2008 (222) ELT 120 (Tribunal-Mumbai), that as regards the shortage of finished goods, the respondent did not dispute the method of weighment and the fact of shortage of the stock vis-`-vis the balance recorded in RG-I Register at the time of stock taking, that since the respondent have not given any satisfactory explanation, the only reason for the shortage found can be the removal without payment of duty and that the Commissioner (Appeals)s finding that there is no evidence of clandestine removal of the goods without payment of duty is not correct. In view of this, he pleaded that the impugned order setting aside the order-in-original passed by the Commissioner is not correct.
4. In the memorandum of cross objection filed by the respondent, they disputed the fact of shortage of goods on the ground that the method of determination of weight of the ingots was not correct, that the weight should have been determined by actual weightment of the entire stock and not on average weight per ingot, that the cenvat credit of additional customs duty had been rightly taken on the basis of photocopy of the triplicate bill of entry and that as such, there is no infirmity in the impugned order.
5. I have carefully considered the submissions from both the sides and perused the records. Sofar as the availment of cenvat credit on the basis of photocopy of the triplicate copy is concerned, the document on the basis of which the credit has been taken is simply a photocopy and not the copy certified by the assessing officers. There is no evidence that the original triplicate copy of the bill of entry had been lost. The Tribunal in a series of a decisions in the cases of Vardhman Spg. & Gen. Mills Ltd. supra) and M/s. CEAT Ltd. (supra) has held that modvat credit is not available on photocopy of the bill of entry when the same has been taken without certifying by the Asstt. Commissioner about loss of the original triplicate copy of the bill of entry. In this case, it is not disputed that the cevnat credit had been taken without the permission of the Asstt. Commissioner. In view of this, the Commissioner (Appeals)s order permitting the cenvat credit on the basis of the photocopy of the bill of entry is not correct and is liable to be set aside.
6. As regards the shortage of the finished goods found, I find that the weighment had been determined in presence of the respondents representative. For determining the weightment of the 10 ingots had been done and the average weight per ingot had been determined and thereafter the total weight had been determined by multiplying the total number of ingots with the average weight. In my view, while determining the weight in this manner, there will be only marginal difference between the weight recorded in the RG-I register and the weight determined but the difference cannot be to the tune of 10 M.T. The respondent have not given any satisfactory explanation for the shortage. In view of this, I am of the view that the duty in respect of the shortage has been rightly demanded and the penalty had been rightly imposed and as such, the Commissioner (Appeals)s order setting aside the order of the original adjudicating authoritys order on this point is not correct and is liable to be set aside.
7. In view of the above discussion, the impugned order is set aside and the order-in-original passed by the Asstt. Commissioner is restored. The Revenues appeal is accordingly allowed. The cross objection also stands disposed of.
( Rakesh Kumar ) Member (Technical) Ckp.