Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise & ... vs M/S. Akar Laminators Ltd on 22 June, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NO. E/718,963/2007 (Arising out of Order-in-Appeal No. RKR(59)41 & 43/07 dated 29.03.2007 passed by the Commissioner of Central Excise & Customs (Appeals) Aurangabad.) For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) ============================================================
1. Whether Press Reporters may be allowed to see : No
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 : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
============================================================
Commissioner of Central Excise & Customs, Aurangabad.
:
Appellants
VS
M/s. Akar Laminators Ltd.
Respondents
And
M/s. Akar Laminators Ltd.
:
Appellants
VS
Commissioner of Central Excise & Customs, Aurangabad.
Respondents
Appearance
Shri S.M.Vaidya, JDR Authorized Representative
Shri Prashant Patankar, Advocate For Respondents
Shri Prashant Patankar, Advocate For Appellants
Shri S.M. Vaidya, JDR Authorized Representative.
CORAM:
Shri Ashok Jindal, Member (Judicial)
Dated of hearing : 22/06/2010
Date of decision :09/07/2010
ORDER NO.
Per : Ashok Jindal, Member (Judicial)
The Commissioner (Appeals) in the impugned order has :-
(a) Reduced the redemption fine on Flexible printed laminated films from Rs.1,00000/- to Rs.25,000/-.
(b) Reduced the redemption fine on Truck No.MP-04 K-5259 from Rs. 1,00000/- to Rs.25,000/-.
(c) Set aside the confiscation of Hologram machine.
(d) Reduced the penalty under Rule 25 of the Central Excise Rules, 2002 on all from Rs. 1,00000/- to Rs.25,000/-.
Aggrieved from the said order Revenue filed an appeal against the reduction of redemption fine, penalty and setting aside the confiscation of Hologram Machine.
2. On the other hand, the assessee (M/s. ALL) filed the appeal on confiscation of flexible printed laminated films and truck and penalty.
3. Brief facts of the case that acting upon the intelligence, the search operation was conducted on 18.8.2003 at 11.a.m. by the officers in the premises of M/s. ALL. The following goods were found detailed below:-
Sr.No. Description of Goods Quantity Value (in Rs.)
01.
Vehicle bearing Reg.No.MP-04/K-5229 01 No. 10,00,000.00
02. Flexible Printed Laminated Film 2981.38 Kg.
4,50,861.00
03. Hologram Machine 01 No. 6,00,000.00 Total:-
20,50,861.00 A show cause notice was issued for confiscation of Flexible Printed Laminated Film, Truck No.MP-04 K-5259 and, Hologram machines which were seized, and penalties were also proposed.
(a) The adjudicating authority confiscated the flexible printed laminated film and imposed a redemption fine of Rs.1,00,000/-.
(b) The impugned truck was also confiscated with an option to redeem the same on payment of fine of Rs.1,00,000/-. ) The Hologram Machine was also confiscated and was allowed to be redeemed on payment of fine of Rs. 50,000/-.
(d) Apart from that a penalty of Rs.1,00,000/- was also imposed on the appellant firm M/s. ALL.
Aggrieved from the same M/s. ALL filed appeal before the Commissioner (Appeals), who reduced the redemption fine on flexible printed laminated film & truck and set aside the confiscation of the Hologram Machine. He also reduced the penalties. Aggrieved from the said order, both (M/s. ALL and the Revenue) filed the appeals.
4. The learned Advocate submits that as per panchanama, the search took place on 18.8.2003 at about 11 a.m. and seized a truck which was found loaded with finished goods for which no Central Excise invoice on any other document was prepared. They also found that in the daily stock account there was no stock of finished goods. On the basis that there was no stock of finished goods, it was alleged that M/s. ALL is trying to remove the goods without entering the same in the statutory record and without duty paying invoice. The learned Advocated contended that the premises were raided it at the time of loading of the goods on the truck and the goods were not removed from the factory at all. Hence, there is no contravention of any Rules of the Central Excise Rules, 2002. As per Rule 6 of the Central Excise Rule, 2002 invoice is to be prepared at the time of removal of goods form the factory. Hence, the confiscation of the goods, the truck and machine are not warranted. The charge of intention is based only on the statement of Mr. A.S. Rane a co-accused, whose cross-examination was not allowed to M/s. ALL. Moreover, the goods were in the shape of semi-finished and were being taken for slitting operation to the job worker. No inquiry were made at the end of job worker or customer. There were no corroborative evidence to arrive at the suspicion of the charge of clandestine removal. As alleged that there was no opening stock on 18.11.2003, the search was taken at 11 a.m., at 11 a.m. no entry was made in the daily stock account as the entries in the statutory record are to be entered only at the end of the day. Hence, non-accountal cannot be the ground for confiscation of the goods. M/s. ALL has not taken any Cenvat Credit on the Hologram machine, hence not liable for confiscation as rightly held by the Commissioner (Appeals). There is no removal of the goods from the factory and there was no intention to evade duty, penalty under Rule 25 of the Central Excise Rules is not justified. Moreover, there is no duty confirmed on the appellant. The penalty under Rule 25 can be imposed to a maximum Rs.10,000/- if at all, possible. Hence prayed the impugned order be set aside.
5. On the other hand, Shri S.M. Vaidya DR submitted that there was nil opening stock on 18.8.2003 and at the time of visit, a truck loaded with the finished goods was found in the factory which was above to leave without any Central Excise invoice or duty paying documents which amounts to clandestine removal of the goods. Moreover, the Hologram machine which was found in the factory of the appellant was also not having any duty paid document. Hence, setting aside the confiscation of Hologram machine and reducing the redemption fine on flexible printed laminated films and the truck are not justified. Penalties also to be imposed on the M/s. ALL to Rs. 1,00,000/-.
6. Heard both sides.
7. On careful examination of the submissions made by both the sides. I find that in this case it is alleged against M/s. ALL that M/s. ALL is removing the goods without payment of Central Excise duty. As per Rule 6 of the Central Excise Rules, 2002, Central Excise invoice is to be prepared at the time of removal of the goods. In this case no goods were removed from the factory at all as admitted by both the parties. The confiscation has been confirmed in this case only on the basis of statement of Shri A.S.Rane co-accused and no cross-examination was given to M/s. ALL of Shri A.S.Rane. Further non-accountal of the stock in the statutory record is also explained by M/s. ALL. As the premises were searched at 11.00 hrs. on 18.8.2003 and the entry in statutory record is to be made at the end of the day, there was no entry of the stock manufactured on 18.8.2003 in the statutory record at the time of visit. In this case, no investigation have been made to the job worker or the customer to corroborate the clandestine removal of the goods. The presumption that goods are to be removed without payment of Central Excise duty is not acceptable. To prove clandestine removal of the goods, Revenue has to establish through corroborative evidence but not by mere statement for which no cross-examination is allowed.
8. With regard to the Hologram machine it is admitted fact that M/s. ALL procured the machine without duty paying document and not availed any Cenvat credit. Hence, the confiscation cannot be done for which no Cenvat credit has been availed by M/s. ALL. As no credit has been availed duty paying document is not required.
9. With these observations, I hold that in this cases as goods were not removed from the factory, no charge of clandestine removal is sustainable. The confiscation of the impugned goods and the truck is not warranted. Further, the appellant has not availed any Cenvat credit on the Hologram machine, hence, setting aside of the confiscation by the Commissioner (Appeal) is justified. The penalties also under Rule 25 of the Central Excise Rule 2002 is not warranted in the light of the facts and circumstances of the case. Accordingly, the impugned order is confirming the confiscation of flexible printed laminated film and truck and imposing the penalty is set aside, but setting aside the confiscation of Hologram machine is upheld.
10. With these observations, both the appeal filed by the Revenue as well as M/s. ALL are disposed of.
(Pronounced in court) (Ashok Jindal) Member (Judicial) Sm 6