Custom, Excise & Service Tax Tribunal
M/S Genus Paper Products Ltd vs Cce, Meerut on 5 May, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing : 5.5.2014
Appeal No. E/911/2012-EX(SM)
[Arising out of the Order-in-Appeal No. 601-602/CE/MRT-II/2011 dated 30.12.2011 passed by the Commissioner (Appeals), Customs, Central Excise & Service Tax, Meerut)
For Approval & signature :
Honble Ms. Archana Wadhwa, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would 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 of the order?
4.
Whether order is to be circulated to the Department Authorities?
M/s Genus Paper Products Ltd. Appellant
Vs.
CCE, Meerut Respondent
Appearance Shri R.C. Gupta, Advocate - for the appellant Shri B.B. Sharma, A.R. - for the respondent CORAM:Honble Ms. Archana Wadhwa, Member (Judicial) Final Order No.51975/2014 Per Archana Wadhwa :
The appellants are engaged in the manufacture of MS ingots as also in Kraft paper. Their factory was visited by the Central Excise officers on 18.12.2009 and various stock verifications were undertaken. As a result, Kraft paper, to the extent of 38.889 MT totally valued at Rs.7,93,336/- was found in excess then the recorded balance. Further MS ingots were found short to the extent of 33.741 MT totally valued at Rs.7,92,914/-.
2. On the above basis, proceedings were initiated for confirmation of demand in respect of shortages along with imposition of penalty and for confiscation of the excess found Kraft paper along with imposition of penalty. The said proceedings resulted in passing of an order by the original adjudicating authority confirming the demand of Rs.65,336/- along with imposition of penalty of identical amount. The excess found goods were confiscated with redemption fine of Rs.25,000/- and penalty of Rs.33,677/-, equivalent to the duty involved in the said excess found goods was imposed. In addition penalty of Rs.15,000/- was imposed upon the employee of the company.
3. On appeal against the above order, Commissioner (Appeals) upheld the appeal accept that the penalty on the employee was set aside. Hence the present appeal.
4. Ld. Advocate appearing for the appellant submits that they are not contesting the duty involved on the short found goods, which is already paid by them. The challenge is only to the imposition of penalty inasmuch as there is no evidence of clandestine removal of the goods.
I find that the Tribunal in a number of cases has held that a shortage by itself is no indication of clandestine removal. Mere payment of duty, to buy peace with the department, does not lead to the conclusion of clandestine clearance. One such reference can be made to Allahabad High Court decision in the case CCE Vs. Meenakshi Castings 2011 (274) ELT 180 (Alld.). Accordingly, while confirming the demand of Rs.65,336/-, set aside the penalty imposed on the said ground.
5. As regards excess found goods, I find that the appellants have been unable to give any explanation for such a huge quantity of Kraft paper, which was not recorded in their RG-I register. The contention of the ld. Advocate that no discrepancy was found in the raw materials stock cannot advance his case. In fact on the contrary, in the absence of any evidence to show that the raw material for the excess found goods were reflected in the raw material account, the said fact goes against him. This clearly shows that the raw material for the excess Kraft paper was not entered in the raw material account. Otherwise also the appellants have not taken any ground before the authorities below that the said excess found goods were manufactured out of the duly accounted for raw material, in which case it is recorded in the statutory records and cannot escape duty.
In view of the above, I find no merits in the appellants contention to set aside confiscation of the said excess found goods. Redemption fine of Rs.25,000/- imposed upon against confiscation is reasonable and requires no interference. The said goods have already been entered after provisional release in the RG-I register and the duty in respect of the same is required to be paid at the time of clearance of the goods. As per the ld. Advocate, the same has already been paid as the goods stand cleared. In respect of penalty, as I have already held that the said goods were not entered in RG-I register with a mala fide intention, I uphold the penalty of Rs.33,677/-.
6. Appeal is disposed of in above manner, (Dictated & pronounced in open Court) (Archana Wadhwa) Member (Judicial) RM 1