Customs, Excise and Gold Tribunal - Delhi
Ms Kanika Marbles vs Cce, Jaipur on 19 February, 2001
Equivalent citations: 2001(133)ELT628(TRI-DEL)
ORDER Shri K.K. Bhatia, Member (T)
1. The brief facts in these appeals are that on 1.3.97 the officers of the Central Excise Division, Ajmer visited the factory premises of the appellants M/s Kanika Marbles Granites. On physical verification of the stock, 5320.69 Sq mtrs of the finished product viz. irregular marbles slabs were found short as against the entry made in statutory record. A statement was recorded from Shri O.P. Khandelwal, Director of the Company who admitted these aforesaid shortage. He further stated that due to his prolonged absence, the parties who get their block shown in their factory, had lifted the marble slabs forcibly. The party deposited a sum of Rs. 1,59,621/- in their PLA on 12.3.97 in respect of the duty involved on the shortage of marbles slabs.
2. Subsequently, M/s Kanika Marbles and Shri O.P. Khandelwal, Director, were issued a show cause notice dated 27.4.98 in which M/s Kanika Marbles were called upon to show cause why duty amount of Rs. 1,59,621/- should not be recovered from them under Section 11A of the Central Excise Act, 1944 and why penalty should not be imposed on them under Section 11 AC and Rules 9(2), 52A and 173Q of Central Excise Rules, 1944. Shri O.P. Khandelwal, Director of the company was called upon to show cause why penalty should not imposed on him under Rule 209A.
3. On considering the reply of both the noticee parties, the Assistant Commissioner of Central Excise, Jaipur vide his order dated 13.11.98 confirmed the Central Excise duty of the aforesaid amount on the appellants and further ordered for the appropriation of the amount already paid by them through their P.L.A. He also imposed penalty of equivalent amount on the party under Section 11AC and a penalty of Rs. 2000/- under Rules 9(2) read with Rules 52A, 173Q and 226 of the Central Excise Rules 1944 on them. He also imposed a penalty of Rs. 5000/- on Shri O.P. Khandelwal, Director under Rule 209A.
4. The above said parties filed appeals before Commissioner (Appeals), Jaipur but the Commissioner (Appeals) vide his order dated 27.2.2000 dismissed them upholding the order passed by the original authority.
5. The present appeals are against these above order of Commissioner (Appeals). I have heard Shri A.L. Mathur, consultant for the appellants and Shri S.C. Pushkarna, JDR for the respondents. Ld. consultant for the appellants contended that in this case the stock taking at the factory premises was conducted on 1.3.97 and the show cause notice issued on 27.4.98 which is beyond a period of six months and therefore the show cause notice in this matter is not sustainable. It is further contended that the show cause notice does not invoke the provisions under the proviso to Section 11A for the purpose of demand of duty and therefore, on this ground alone neither any recovery can be made from the appellants for a penalty can be imposed on them under Section 11AC. As regards the penalty on Shri O.P. Khandelwal, Director it is contended that in this case shortage of goods has been noticed. The shortage in itself, it is contended, cannot be considered as removal and Shri Khandelwal as Director is in no way linked with any removal, hence no penalty is liable to be imposed on him.
6. Shri S.C. Pushkarna, Ld. JDR for the respondents reitrates the findings arrived at by the lower authorities.
7. I have considered the submissions made before me. At the very outset it may be stated that the appellants are not contesting the findings on the shortage of the excisable goods ascertained by the departmental officers on their visit to their factory premises on 1.3.97. They have also not challenged the amount of duty liable to be recovered from them on the shortage and in fact they have voluntarily deposited the amount of Rs. 1,59,621/- in their PLA on 12.3.97. Ld. consultant for the appellants states that the show cause notice in this case is issued on 27.4.98 which is beyond a period of six months from the date of visit of the officers to the factory premises and he therefore, contends that the show cause notice is time barred. In this regard it may be observed that the larger bench of CEGAT in Nizam Sugar Factory Vs CCE Hyderabad 1999(114) ELT 429(T) have already held that date of knowledge of the officers of the department in respect of clandestine removal of the goods cannot be reckoned for the purpose of computing the period for issue of show cause notice. The notice in this case has been issued in terms of the provisions under Section 11A by alleging clandestine removal, therefore, this contention of the Ld. consultant has not force. Further argument is advanced that the show cause notice does not invoke the proviso under Section 11A and therefore extended period for the demand cannot be sustained. In this regard it is observed that as per the facts on record certain shortages of the excessible goods manufactured by the appellants were found in their factory premises on 1.3.97 which are admitted by the appellants and the duty deposited by them in their PLA within 12 days. Secondly, even in the show cause notice it is clearly alleged that the assessee had removed 5320.69 Sq. meters of marbles slabs clandestinely without issuing invoice without proper account at in statutory records and payment of Central Excise duty thereby contravening the provisions of Central Excise Rules as mentioned therein. Therefore, they were called upon to show cause why the stated amount of duty should not be recovered from them under Section 11A. It is also mentioned that the assessee had deposited this amount and the same was liable to be appropriated and further that they were liable for penal action under Section 11AC. In view of these allegations, it is clear from the language of the show cause notice it cannot be stated that the particular provisions for the purpose of demand of duty under extended period of time has not been invoked and therefore, this contention of the Ld. consultant is also not acceptable.
8. I however, agree with the contention that there is no particular charge made out against Shri O.P. Khandelwal, Director either in the show cause or in the order-in-original. He was not even present at the time of verification of the records. The penalty imposed on him is therefore, not sustainable. Further I am of the view that the imposition of two penalties, one under Section 11AC and another under Rule 9(2) etc. are also not called for in the facts and circumstances of the case and therefore, I set aside the penalty of Rs. 2000/- imposed on the appellant M/s Kanika Marble under Rule 9(2) and penalty of Rs. 5000/- imposed on Shri O.P. Khandelwal.
9. But for the above modification the appeals otherwise fail and the same are accordingly rejected.
Announced and dictated in the court.