Customs, Excise and Gold Tribunal - Delhi
Cce vs Jadia Pipes (India) Ltd. on 27 November, 2006
Equivalent citations: 2007(115)ECC272, 2007ECR272(TRI.-DELHI), 2008(221)ELT132(TRI-DEL)
ORDER M.V. Ravindran, Member (J)
1. This appeal is directed against order in appeal dated 14/10/2003.
2. The relevant fact that arise for consideration are officers of the Central Excise Division, Rohtak visited the unit of the respondent and during the course of investigation, they found that there was a shortage of raw material on which credit was availed by the respondent. The respondent immediately reversed the amount of credit involved. Subsequently a show cause notice was issued for imposition of penalty and for appropriation of the amount paid by the respondent. Adjudicating authority appropriated the amount of the demand and also imposed equivalent amount of penalty under Rule 173Q of the Central Excise Rules, 1944. On an appeal, Commissioner (Appeals) set aside the order in original to the extent it imposed equivalent amount of penalty. Aggrieved by such order, revenue filed an appeal before the Tribunal and Tribunal vide its order dated 01/06/05 modified the order of the Commissioner (Appeals) and reduced the penalty to Rs. 15,000/-. The revenue feeling aggrieved approached the Hon'ble High Court of Punjab & Haryana in Central Excise Appeal No. 194/05. Hon'ble High Court remanded the matter back to the Tribunal by observing as under:
In view of orders of this Court dated 21.7.2006 in CEA No. 56 of 2005 (Commissioner of Central Excise, Delhi-IV, New CGO Complex, NH-IV, Faridabad v. Illpea Paramount Pvt. Ltd.) and 25.7.2006 in CEA No. 13 of 2005 (Commissioner of Central Excise Delhi - III v. Machino Montell (I) Limited and Anr.), we allow this appeal, set aside order of the Tribunal and remand the case to the Tribunal for a fresh decision on the question of levy of penalty. If it is held that levy of penalty is warranted having regard to the requirements of the statute, the Tribunal will be bound to levy penalty equal to the amount of duty. Parties are directed to appear before the Tribunal for further proceedings on October 9, 2006.
3. Considered the submissions made by both sides and perused records. It is noticed from the records that the demand of the duty has arisen due to the shortage of raw materials which was noticed at the factory of the respondent, during the Central Excise officer's visit. In the statement recorded under Section 14 of the Central Excise Act, the Director of the respondent had admitted about the shortage but gave an explanation, that the shortage was due to improper weighment of the raw material when received in the month of June, 2001. It is seen from the records that the respondent's Director voluntarily debited the amount in their RG-23A Part II register accepting the error of his employees in not recording the correct weight of the input received by them. I also find that the show cause notice does not bring out anything to indicate that there was clandestine removal of the inputs on which credit was availed by the respondent.
4. It is settled law that in order to prove the clandestine removal of the goods or raw material, something more then mere allegation is required. In the absence of any evidence indicating that there was clandestine removal, a mere suspicion or shortage of raw materials in the factory could not indicate clandestine removal of the said raw material.
5. Be that it may be, the respondent is unable to pinpoint exactly whose mistake in weighment resulted in short receipt of raw material and what action was initiated against such employees. The respondent is not challenging the amount of the duty confirmed and appropriated against the deposits made by them, during the proceedings before lower authorities.
6. In view of the facts and circumstances as indicated above, the impugned order of the learned Commissioner (Appeals) to the extent it upholds the confirmation of demand is liable to be upheld, while the order in appeal to the extent its sets aside the entire penalty imposed on the respondent is modified to the extent that the respondent is liable for penal action and an amount of Rs. 15,000/- as penalty would meet ends of justice. The appeal of the revenue stands accordingly disposed of on the above terms.
(Dictated and pronounced in the open court)