Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs M/S. Abs Metals (P) Ltd on 6 September, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Excise Appeal No. 2458 of 2009- Ex(SM)
[Arising out of Order-In-Appeal No. 54/RPR-II/2008 dated 06.08.2008 passed by Commissioner (Appeals-II), Customs & Central Excise, Raipur (CG)]
For approval and signature:
Hon'ble 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?
Yes
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
Commissioner of Central Excise Appellants
Raipur
Vs.
M/s. ABS Metals (P) Ltd. Respondent
Appearance:
Shri Dharam Singh, AR for the Appellants None for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Date of Hearing: 11.08.2016 Date of Decision: 06.09.2016 ORDER NO . FO/ 53384 /2016-Ex(SM) Per Ms. Archana Wadhwa :
Being aggrieved with the order passed by Commissioner (Appeals) vide which he has rejected the Revenue appeal, inasmuch as the impugned order of the Additional Commissioner was also in favour of the respondent, Revenue has filed the present appeal.
2. I have heard Shri Dharam Singh, learned DR appearing for the Revenue. Nobody appeared for the respondent.
3. As per facts on record, the respondents are engaged in the manufacture of HB wire and binding wire falling under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985. Their factory was visited by the Central Excise officer on 31.3.2007, who conducted various checks and verifications. As a result, certain raw materials and final products were found to be short and a small quantum of final product was found to be in excess than the recorded balance. Statements were recorded and panchnama was prepared.
4. Based upon the same, proceedings were initiated against the respondents by way of issuance of show cause notice dated 26.09.06 proposing to confirm the demand of duty of Rs.37,36,296/- leviable on 43.220MT of raw material and 845.690 MT of finished goods found short in the appellants premises, Inasmuch as assessee had already deposited an amount of Rs. 37,36,296/- at the time of visit of officers, the notice also proposed to appropriate the same. Further, the quantum of 19 MT of wire rods in coil raw materials and 0.360 MT of scrap found in excess than the recorded balance was proposed to be confiscated under the provisions of Rule 15 of the Cenvat Credit Rules, 2004 and Rule 25 of the Central Excise Rules, 2002. Notice also proposed imposition of penalty upon the respondent under Rule 25 of Central Excise Rules, 2002 and Rule 15 of Cenvat Credit Rules, 2004 read with section 11 AC of the Central Excise Act, 1944.
5. After due process of law, the original originating authority arrived at a finding that there were no evidence of clandestine removal by the assessee and as such, it cannot be held to be a case of malafide intention so as to impose penalty upon the assessee under section 11AC of the Central Excise Act. He however, confirmed the demand of duty inasmuch as there were shortages in the factory and the appellant had already deposited the duty amount. He ordered for appropriation of the same. However, he imposed penalty of Rs. One lakh under Rule 25 of the Central Excise Rules, 2002 for improper maintenance of records.
As regards seizure of 19 MT wire rods, he observed that there was no evidence on record to show that the same was not recorded with any ulterior motive of clearing the same without payment of duty, as such, imposition of penalty was not warranted. He accordingly, dropped the proposition to confiscate the said goods.
6. Being aggrieved with the order of Additional Commissioner, Revenue filed an appeal before Commissioner (Appeals) on the ground that penalty under section 11AC, equivalent to duty amount should have been imposed and the excess found goods should have been confiscated. By a detailed order Commissioner (Appeals) rejected the Revenues appeal as he did not find any justifiable ground to interfere in the order of original adjudicating authority.
7. Hence the present appeal by Revenue.
8. After having heard the learned DR appearing for the Revenue, and after having gone through the impugned orders as also the memo of appeal, I find that the Revenues stand that penalty should have been imposed under section 11 AC is on the sole ground that the shortages detected by the Revenue are indicative of the clandestine activities of the assessee and assessee having deposited the entire duty without questioning the same, lead to only one inevitable fact that short found goods were removed from the factory without payment of duty and in a clandestine manner. The said plea of the Revenue, which was also raised before the Commissioner (Appeals) stands dealt with by the appellate authority by observing that apart from the shortages, there is nothing on record to show that the said shortages has occurred on account of clandestine activities of the assessee. Merely because the assessee has deposited the duty will not act as prejudice calling for imposition of equivalent penalty.
9. It is a fact that Revenue is solely relying upon the shortages. There is virtually no other evidence to reflect upon the manufacture of appellants final product, their transportation, recognition of the buyers and receipt of sales proceeds by allegedly clandestine removed goods. In the absence of such evidence and in the light of precedent decision of the Tribunal, which stand discussed in detail by the Commissioner (Appeals), the charges of clandestine removal cannot be held to have been established. The onus to prove clandestine removal is admittedly on the Revenue and is required to be discharged with production of sufficient evidence, which at least may lead to the probability of having removed the goods. As such, I am of the view that the findings arrived at by the lower authorities that shortages by itself cannot held to be clandestine removal of goods is appropriate decision, thus not requiring any interference with.
10. As regards the confiscation of the excess found goods, I find that it stand recorded by the authorities below that there was no evidence to show that such non-recording in the statutory records was on account of any malafide. Neither were the goods in process of being removed nor is there any sufficient material to show that same were meant for removal without payment of duty. As such, I find no justification for the confiscation of the same as prayed for by the Revenue.
10. In view of the foregoing, no merits are found in the Revenues appeal. The same is accordingly rejected.
(pronounced in the open court on 6/9/16 )
( Archana Wadhwa ) Member(Judicial)
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