Custom, Excise & Service Tax Tribunal
M/S.Shyam Steel Industries Ltd vs Commissioner Of Central Excise & ... on 6 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No. E/75092/14
(Arising out of Order-in-Appeal No.52/BOL/2013 dated 09.05.2013 passed by the Commissioner of Central Excise(Appeals), Kolkata-III.)
FOR APPROVAL AND SIGNATURE
HONBLE SHRI H.K.THAKUR, 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
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s.Shyam Steel Industries Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise & Service Tax, Bolpur
Respondent (s)
Appearance:
Shri S.Bhowmik, Advocate for the Appellant Shri S.Mukhopadhyay, Supdt.(AR) for the Revenue CORAM:
Honble Shri H.K.Thakur, Member(Technical) Date of Hearing/Decision :- 06.09.2016 Date of Pronouncement :- 06.09.2016 ORDER NO.FO/75982/2016 Per Shri H.K.Thakur.
The present Appeal has been filed by the Appellant against Order-in-Appeal No.52/BOL/2013 dated 09.05.2013 passed by the Commissioner of Central Excise(Appeals), Kolkata-III as first appellate authority. Under this Order-in-Appeal dated 09.05.2013 first appellate authority has upheld the Order-in-Original dated 30.09.2008 passed by the Adjudicating authority.
2. Shri S.Bhowmik (Advocate) appearing on behalf of the Appellant argued that during a physical stock verification in the presence of Appellant was done by the Office of the Central Excise Headquarters, Anti-Evasion Wing, Bolpur on 05.12.2007. That during the stock-taking 118.530 MTs of TMT bars (finished goods) were found short. That Appellant confirmed shortage in physical stock-taking, but never admitted that the shortages were clandestinely removed from the factory. That Appellant has cleared 181783.965 MTs of finished TMT bars and percentage of difference comes to only 0.033%. It was strongly argued by the learned Advocate that there is no evidence of clandestine removal from Appellants factory and the case cannot be made only on the basis of statements which do not admit clandestine removal of the goods. It was thus argued by the learned Advocate that Appeal filed by the Appellant may be allowed. Alternately it was also argued by the learned Advocate that Adjudicating authority has not extended the Appellant option of 25% reduced penalty under Section 11AC of the Central Excise Act, 1944. That if on merits Appellants arguments are not considered then option of 25% reduced penalty may be extended to the Appellant.
3. Shri S.Mukhopadhyay, Supdt.(AR) appearing on behalf of the Revenue made the Bench go through a statement dated 05.12.2007 of Shri Dipak Choudhary, Manager of the Appellant to argue that shortages were accepted by the Appellant, but it was also mentioned that entries will be scrutinized to find out the reasons behind the shortages. That Appellant did not revert back to the investigation explaining the shortages. That further while answering question No.6 Shri Dipak Choudhary submitted that duty liability on shortages appellant will pay the Central Excise duty. That no retraction of the statement was made by the Appellant during the course of investigation and only in reply to the show cause notice Appellant took a different stand which is an after-thought. Learned AR strongly defended the Order-in-Appeal dated 09.05.2013 passed by the first appellate authority.
4. Heard both sides and perused the case records.
5. It is observed from the show cause notice dated 22.04.2008 that Officers of Central Excise Anti-Evasion Unit, Bolpur visited the factory premises of the Appellant on 05.12.2007 and found a shortage of 118.53 MTs of TMT bars. A statement dated 05.12.2007 of Shri Dipak Choudhary, Manager of the Appellant was recorded on the date of visit. Shri Choudhary while answering question No.6 of the statement accepted the shortages observed during joint stock verification. It was also stated that he is not in a position to explain the reason behind the shortages and that Appellant will scrutinize the shortages and will try to find out the reasons behind such shortages. Appellant never reverted back to the investigation before the issue of show cause notice that shortages found were reconciliable and that in fact there was no shortages in the stock of finished goods. A different stand taken after the issue of show cause notice, without any retraction, will have to be considered as an after-thought under proper legal advice. By admitting the shortages and not coming forward to explain the same, blocks the investigation. It has been discussed in para 5.6 of Order-in-Original dated 30.09.2008, that in the case of Majestic Auto Ltd. v. CCE [2004 (172) ELT 391 (Tri.-Del.)] CESTAT held that demand with respect to shortages can be confirmed when no tangible evidence and explanation was offered by the noticee. It is also made clear in this case law that there is no need for the department to produce any tangible and positive evidence to prove clandestine removal when Appellant has admitted the shortages and does not come forward to explain the shortages. No contrary judgement has been brought on record by the Appellant. In view of the above observations duty has been correctly confirmed against the Appellant along with interest.
6. So far as not extending option of 25% reduced penalty to the Appellant, it is observed that Adjudicating authority under Order-in-Original dated 30.09.2008 did not extend the option of 25% reduced penalty under Section 11AC to the Appellant. In the interest of justice Appellant is given the option to pay 25% reduced penalty if the same is paid along with duty and interest demanded within 1(one) month from the date of receipt of this order.
7. In view of the above, Appeal filed by the Appellant is allowed only to the extent indicated in para 6 above.
(Operative part of the order was pronounced in the open court.)
SD/
(H.K.THAKUR) MEMBER(TECHNICAL)
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Appeal No.E/75092/14