Custom, Excise & Service Tax Tribunal
M/S. V R Insulations Pvt. Ltd vs Commissioner Of Central Excise on 17 March, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. 248 of 2012-Ex[SM]
[Arising out of Order-In-Appeal No. 324/CE/Ldh/2011 dated 17.10.2011 passed by Commissioner of Customs & Central Excise (Appeals), Chandigarh]
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
yes
M/s. V R Insulations Pvt. Ltd. Appellants
Vs.
Commissioner of Central Excise, Respondent
Ludhiana Appearance:
Ms. Rinki Arora, Advocate for the Appellants Shri R K Mishra, AR for the Respondent Date of Hearing /decision: 25.03.2014 Date of Hearing /decision: 17.04.2014 ORDER NO. FO/ 51630 /2014- (SM) Per Archana Wadhwa:
Brief facts of the case are that the appellant, registered with the department, are engaged in the manufacture of super enameled (SE) copper wire, copper wire, ordinary copper wire rod and copper ingots falling under Chapter 74 of the 1st Schedule to the Central Excise Tariff Act, 1985. The Divisional Preventive Staff of Central Excise Division, Jalandhar visited the factory premises of the appellant on 01.10.2008. The scrutiny of the records revealed nil closing balance in the daily stock register maintained in respect of super enameled (SE) copper wire, ordinary copper wire, copper wire rod and copper ingots. However, on physical verification of stock of finished goods, conducted in the presence of Sh. Unnikrishna Pillai, Excise Manager of the appellant and two independent panchas, a stock of 4835.224 kgs. of SE copper wire (winded on plastic reels) of different gauges and 325 kgs. of copper scrap was found lying in the factory premises against nil balance in daily stock register (last entry had been made on 18.09.2008). Shri Unnikrishna Pillai, Excise Manager of the appellant in his statement recorded on spot, could not justify the presence of unaccounted stock of finished goods weighing 4835.224 of SE copper wire and 325 kgs. of copper scrap totally valued at Rs. 21,94,402/-. The visiting staff seized the said 4835.224 of SE copper wire and 325 kgs. of copper scrap totally valued at Rs. 21,94,402/- on the reasonable belief that the seized goods had been manufactured and kept unaccounted for with the intention to evade payment of duty by clandestine removal. Further, during scrutiny of resumed records of the appellant, a stock of 1960 kgs. of zinc scrap (raw material) valued at 1,96,000/- involving total central excise duty amounting to Rs. 29,167/- was also found short as per reflected quantity in the raw material stock register.
2. Shri Pawan Kumar Gupta, Director of the appellant in his statement dated 07.10.2008 inter alia, submitted that out of 4835.224kgs. of SE copper wire seized on 01.10.2008, 938 kgs. of SE copper wire was fully manufactured, lying in boxes ready to dispatch, whereas remaining 3897.224 kgs. (winded on plastic reels) was not manufactured fully since it was to be tested for elongation and weighed; that 938 kgs. of SE copper wire was not entered in the RG-1 register since last entry in RG-1 register was made on 18.9.2008 and the subject production had been made only in last 3-4 days and similarly they could not make entry for copper scrap since the subject scrap had been generated in only last 3-4 days. He could not explain why no production had been shown on the days when as per the attendance register the workers had been reporting for duty for night shifts. He also could not explain the shortage of 1960 kgs of zinc scrap.
3. On the above basis, proceedings were initiated by way of issuance of show cause notice dated 12.3.09 resulting in passing of present impugned order vide which the excess found goods stand confiscated with an option to the appellant to redeem the goods on payment of redemption fine of Rs. 3,16,000/-. In addition, the Cenvat credit of Rs.29,167/- involved in short found raw materials stand confirmed along with interest. Penalty of Rs. 3,45,000/- stand imposed under section 11 AC of Central Excise Act read with Rule 25 of Central Excise Rules, 2002. The order passed by the Adjudicating authority stand upheld by the Commissioner (Appeals).
Hence the present appeal.
4. The short issue required to be decided in the present appeal is as to whether the excess found goods were not entered in the statutory records with an intent to evade payment of duty. It is admitted position that the statutory records were not maintained for the last 22 days. As such, there is clear violation of Central Excise Rules.
Further, the appellant has taken a categorical stand that only 938 Kgs. of SE copper wire was fully manufactured, lying in boxes ready to dispatch, and the remaining 3897.224 Kgs. of the goods were still in semi-finished condition inasmuch as the same were to be tested. As such, by extending the benefit to the assessee, I hold that only 938 Kgs. of copper wire, which was ready for dispatch without making entries in the records are liable to confiscation. The lower authorities have imposed redemption fine equivalent to the duty in respect of entire 4835.224 Kgs. of copper wire. Having held only 938 Kgs. of copper wire liable to confiscation, I reduce the redemption fine to duty involved on the said quantum of copper wire which shall be calculated by the department.
5. As regards the shortages of raw materials, the appellant have already deposited the duty of Rs.29,167/- and is not contesting the same.
6. As regards penalty, I find that admittedly the appellant had not entered the goods in their RG 1 register and were also in preparation for clearing the 938 Kgs. of copper wire, without recording the same. As such, they are liable to penalty. However, keeping in view the overall facts and circumstances of the case, penalty is reduced to Rs.75,000/- (Rupees Seventy-five thousand only).
7. The appeal is disposed of in the above terms.
(pronounced in the open Court on )
( Archana Wadhwa ) Member(Judicial)
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