Custom, Excise & Service Tax Tribunal
B.P. Ispat Pvt. Ltd vs Cce, Raipur on 17 April, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing : 24.3.2014
Date of Pronouncement : 17.4.2014
Appeal No. E/155/2012-ST(SM)
[Arising out of the Order-in-Appeal No. 114/RPR-I/2011 dated 15.7.2011 passed by the Commissioner (Appeals), Customs, Central Excise & Service Tax, Raipur)
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?
B.P. Ispat Pvt. Ltd. Appellant
Vs.
CCE, Raipur Respondent
Appearance Shri Jitendra Singh, Advocate - for the appellant Shri M.S. Negi, D.R. - for the respondent CORAM: Honble Ms. Archana Wadhwa, Member (Judicial) Final Order No. 51616/2014 Per Archana Wadhwa:
As per the facts on record the appellant is engaged in the manufacture of MS rods, channels and angles etc. falling under Chapter 72 of the Central Excise Tariff Act. Their factory was visited by the Central Excise officers on 20.2.2009, who conducted various checks and verifications. As a result finished goods to the extent of 6.379 MTs were found in excess and raw material i.e. MS ingot to the extent of 84.295 MTs were found short. Statement of the Director accepted the said shortages and excesses.
2. Subsequently vide their letter dated 21.2.2009 the appellant disputed the difference in the stock of raw material stating that the stock of raw material in the furnace was 80 MT instead of 35 MT. Again on 8.5.2009, the statement of the Director was recorded where he, inter alia, stated that the raw material viz. M.S. ingots is fed in furnace in two rows. As per requirement, they also arrange the aforesaid two rows of M.S. ingots in two tiers. In case the M.S. ingots is arranged in two tiers, the capacity of furnace is 80 MT; whereas in case material is arranged in one tier, the capacity of furnace comes to 35 MT. However, he stated that on an average the daily production of their plant is about 30-32 MT. In the statement he also stated that all the activities in their plant i.e. from receipt of the raw material till dispatch of the finished goods to the customer are carried out by him/under his supervision and within his knowledge. As such he is responsible for all the activities being carried out in their plant. Statement dated 29.7.2009, of Shri Arun Agrawal, Director of M/s Raja Ispat Pvt. Ltd. Silpahari, Bilaspur was also recorded under Section 14 of the Central Excise Act, 1944.
3. Revenue got in touch with Shri Arun Agrawal, Director of M/s Raja Ispat Pvt. Ltd., who vide his statement dated 29.7.2009 deposed that it is not possible to feed M.S. ingots in furnace in two tiers as it affects the power of pusher and make us a loss.
4. On the above investigation basis, proceedings were initiated against the appellant vide Show Cause Notice dated 7.8.2009 proposing confirmation of demands alleging clandestine removal. The said proceedings culminated into an order passed by the original adjudicating authority confirming the demand of duty of Rs.1,95,397/- and imposition of penalty of identical amount. In addition the excess found final product was confiscated with option to redeem the same on payment of redemption fine of Rs.15,000/-. The said order was upheld by Commissioner (Appeals) and hence the present appeal.
5. After hearing both the sides duly represented by Shri Jitendra Singh, ld. Advocate for the appellant and Shri M.S. Negi, ld. DR for Revenue.
I find that the Revenues entire case is based upon the shortages detected at the time of visit of the officers. The Director on the spot statement accepted such shortages but did not accept that the same were on account of clandestine removal. In fact immediately on the next day, he explained that the raw material in the furnace was taken as 35 MT whereas the same was to the tune of 80 MT.
6. In any case and in view of the matter, I find that there is virtually no evidence on record indicating that such short found raw material has been either cleared by the appellant in a clandestine manner or has been used in the manufacture of final product cleared without payment of duty. There are no investigations done by the department and no further evidence stands produced on record.
Tribunal n the case of Swaroop Casting P. Ltd. Vs. CCE, Meerut-I - 2013 (290) ELT 392 (Tri.-Del.) has held that shortages simplicitor does not lead to inevitable conclusion of the clandestine activities which required production of sufficient evidence. As such, by following the said decision, I find no merits in the confirmation of demand or for imposition of penalty,.
7. As regard the excess, I find that there is no evidence on record that such alleged excess found goods were for clandestine removal, in the absence of which the confiscation of the same cannot be upheld. The same is accordingly set aside.
8. In view of the above, the impugned orders are set aside and appeal allowed with consequential relief to the appellant.
(Archana Wadhwa) Member (Judicial) RM 1