Customs, Excise and Gold Tribunal - Delhi
M/S. Jaipur Steel Strips Ltd. vs Cce, Jaipur on 18 April, 2001
Equivalent citations: 2001(136)ELT1373(TRI-DEL)
ORDER
P.S. Bajaj
1. This appeal has been filed by the appellants against the impugned order in appeal dated 28.3.2000 issued on 10.4.2000 passed by the Commissioner (Appeals) vide which he had upheld the order in original dated 16.10.98 of the Deputy Commissioner of Central Excise confirming demand of Rs.2,71,003/- under Section 11-A of the Central Excises Act, 1944 and imposing penalty of the equal amount under Section 11-AC of the Act and another penalty of Rs.1,00,000/- under Rule 173-Q of the Central Excise Rules on them.
2. The facts giving rise to this appeal may briefly be stated as under:
3. The appellants are engaged in the manufacture of cold rolled strips falling under sub-heading 7211.51 of the CETA. The Preventive officers paid a surprise visit to their factory on 23.4.94 and found that there was shortage of 7.8019 MT of CR strips (finished product) and 40.420 MT of HR coils raw material). It also revealed that they were maintaining private weighment register giving details of the description of the CR strips. Shri Madhusudan Chand, Works Manager of the appellants who was present at that time in the factory premises admitted the shortage of the finished product and the raw material. He also admitted the correctness of private production/weighment register regarding the production for period 26th July 1993 to 19.1.94. Similarly, his statement was also endorsed by Shri A.K.Jain, Managing Direction of the appellants whose statement was recorded on 27.4.94 and he also confirmed the shortage and authenticity of the private production/weighment register. The appellants were accordingly thereafter served with a show cause notice vide which duty demand of Rs.2,71,003/- was raised for the clandestine removal of the goods and penalty under Section 11-AC of the Act as well as under Rule 173-Q of the Rules was also proposed to be imposed.
3. The appellants contested the correctness of that show cause notice. They denied the shortage of the finished products as well as raw material and maintained that the goods werenever physically weighed in the factory premies. The Deputy Commissioner, however, did not agree with the version of the appellants and he confirmed the duty demand of Rs.2,71,003/- on them and also imposed penalty of the equal amount under Section 11-AC of the Act, besides imposing penalty of Rs.1,00,000/- under Rule 173-Q of the Rules. This order of the Deputy Commissioner was, however, challenged by the appellants before the Commissioner (Appeals), but they remained unsuccessful as their appeal was rejected and the order of the Deputy Commissioner was affirmed by the Commissioner (Appeals).
4. The appellants have come up in appeal before the Tribunal against the impugned order of the Commissioner (Appeals).
5. So far as the duty liability of the appellants amounting to Rs.2,71,003/- for the shortage of finished goods and the raw material is concerned, the same has not been challenged before him by the learned counsel. There are concurrent findings of both the authorities below that the Preventive Party found the shortage of 7.8019 MT CR strips (finished products) and of 40.410 MT of HR coils (raw material) on conducting the raid on 23.4.94 on the factory premises. These findings have been based on the cogent evidence placed on record by the Excise Department before those authorities. Even the Works Manager of the appellants, Shri Madhusudan Chand in his statement recorded on 23.4.94 admitted this shortage and his statement was also endorsed by the Managing Director of the appellants, Shri A.K. Jain in his statement recorded on 27.4.94. Both these persons never retracted their confession at any stage on the ground of having been obtained under duress, threat or coercion and as such the same had been rightly relied upon by the authorities below for confirming the duty demand of Rs.2,71,003/- on the appellants.
6. The learned counsel for the appellants has, however, only contended that the penalty amount equal to the duty amount under Section 11-AC of the Act could not be imposed as this provision was not on the statute on the date when the alleged clandestine removal of the goods was committed by the appellants.
7. The learned JDR has fairly conceded that the provisions of Section 11-AC could not be invoked against the appellants being not in existence on the date when the wrongly act of clandestie removal of the goods was committed by the appellants. Therefore, penalty of Rs.2,712,003/- imposed on the appellants under Section 11-AC of the Act is accordingly set aside.
8. Regarding the imposition of penalty of Rs.10,00,000/- on the appellants by the authorities below, the counsel has contended that the same was unjustified and even otherwise is quite exorbitant. He has prayed for substantial reduction of the penalty amount on the ground that the appellants have already suffered losses and are facing financial crises. The learned JDR has no objection if some relief in the penalty amount is allowed to the appellants. Therefore, keeping in view the facts and the circumstances of the case and the fact that the appellants had already deposited Rs.2,12,523/- out of the total duty amount of Rs.2,71,003/- before the issuance of the show cause notice, the pantly amount is reduced to 20,000/-.
9. In view of the discussion made above, the impugned order of the Commissioner (Appeals) accordingly is modified. and the appeal of the appellants stands partly allowed.
Dictated and pronounced in the open Court.