Custom, Excise & Service Tax Tribunal
Cce, Lucknow vs M/S Marwa Cement India (P) Ltd on 15 March, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Date of Hearing : 15.3.2013 Excise Appeal No. 3589-3590 of 2006-SM [Arising out of Order-in-Appeal No. 77-78-CE/206 dated 19.6.2006 passed by the Commissioner (Appeals), Central Excise & Service Tax, Lucknow) For Approval & signature: Honble Shri S.S. Kang, Vice President 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? CCE, Lucknow Appellant Vs. M/s Marwa Cement India (P) Ltd. Respondent
Appearance:
Appeared for Appellant : Shri R.K. Verma, A.R.
Appeared for Respondent : Shri Vikrant Kackaria, Advocate
CORAM: Honble Shri S.S. Kang, Vice President
Final Order No. 56042-56043/2013 dated 15.3.13
Per S.S. Kang :
Heard both sides.
2. The appellant filed these appeals against the order-in-appeal passed by the Commissioner (Appeals).
3. The Revenue filed these appeals and the Tribunal vide Final Order dated 26.11.2008 allowed the appeal filed by the Revenue in absence of the respondent. Thereafter the respondent filed ROA application and the Tribunal vide order dated 3.12.2009 dismissed the application. The respondent approached the Honble Allahabad High Court. The Honble Allahabad High Court vide order dated 8.4.2011 set aside the orders passed by the Tribunal and directed the Tribunal to decide the appeals filed by the Revenue after affording an opportunity of hearing to the assessee. In view of the above order passed by the Honble Allhabad High Court the appeals are taken up for hearing.
4. The brief facts of the case are that the respondents are engaged in the manufacture of cement. The factory premises of the respondents were visited by the Revenue official on 12.7.2003. During physical verification 45 bags of cement were found excess than the quantity recorded in the statutory records. The same were seized. During the verification, it was found that the applicant packing 51.07 kgs. of cement in the bag whereas the appellants were showing the quantity of bag 50 kg and paying duty on 50 kg. In this regard statement of Shri Mohammed Ibrahim, Managing Director and Shri S.D. Sharma, Manager was recorded whereby they stated excess quantity on cement bags as there are certain losses during the loading and unloading. The adjudicating authority confiscated the cement bag, which was found excess allowed the same to be released on fine and also confirmed the demand of Rs.1,82,497/- in respect of cement cleared in excess to the 50 kg. per bag and imposed the penalties. The present respondent filed appeal before the Commissioner (Appeals) and Commissioner (Appeals) upheld the confiscation in respect of cement bag found short. The Commissioner (Appeals) however set aside the demand of Rs.1,82,497/- which is in respect of cement in excess to 50 kg in the bag and also set aside the penalty in this regard. The Commissioner (Appeals) also set aside the penalty imposed on Shri Mohammad Ibrahim, Managing Director. The present appeals are against the order passed by the Commissioner (Appeals).
5. The contention of the Revenue is that the respondent admitted clearing the excess cement and paying duty only on 50 kg of cement therefore the demand is rightly made and the impugned order is not sustainable. The contention is that this practice is followed by the respondents in the previous period is admitted by the Managing Director in his statement. Hence the impugned order is set aside and order passed by the adjudicating authority be restored.
6. The respondent submitted that only 10 bags were weighed and it was found that there was excess quantity of .070 kgs in each bag. The contention is that 700 gms is the weight of the bag and excess quantity to the extent is only one kg per bag. The contention is that the Revenue issue a Circular No. 876/14/2008 dated 20.10.2008 whereby it has been clarified that variation of 1% should be allowed for the purpose of levy of central excise duty. The respondents also relied upon the provision of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 whereby a maximum permissible error were in relation to the quantity in the bag in respect of cement is 2%.
7. The respondent submitted that the Managing Director Shri Mohammad Ibrahim in his statement had not admitted that the respondents were clearing the same clandestinely. He disclosed the factual position that the excess quantity of cement is packed in the bag as there was losses during the loading and unloading in factory premises and there was no intention to clear the goods in excess. It was also relied upon the decision of the Tribunal in the case off CCE Vs. Sagar Cements Ltd. 2005 (180) ELT 196 whereby the Tribunal held in favour of the manufacturer where variation is 2% in the packing of the sale.
8. In the present case, Revenue is demanding duty in respect of the cement which was packed in the bags in excess to the quantity of 50 kg. on which duty has been paid. The weighment of 10 bags were conducted in the premises and it was found that the bags were of the weight 51.070 kgs. 700 gms is the weight of the bags hence the total quantity in excess is only one kg. As per Boards Circular dated 20.10.08 the variation of 1% is allowed for cement filled in bag for the purpose of levy of Central Excise duty. Further, I find that as per the Standards of Weights and Measures (Packaged) Commodities Rules 1977 the maximum permissible error in relation to in the packing is 2% in respect of cement bag.
9. I have gone through the statement of Shri Mohammad Ibrahim, Managing Director in his statement he never admitted that they were clearing the cement in excess to the quantity packed in the bags clandestinely and receiving consideration in respect of excess quantity. The respondent were clearing showing weight of the bag is 50 kg and paying duty on 50 kgs. Further i find that in the case of Sagar Cements Ltd. (supra) relied upon by the respondent held as under :-
2. We find that the lower appellate authority has clearly recorded that as per the provisions of the standards of Weights and Measures Act, 1976 and the Rules made thereunder, a maximum permissible error of 2% is allowed in weighment of cement, whereas in the case of the goods in dispute, discrepancy was only 1% with reference to the total quantity of cement cleared during the period and by working out the variation as a percentage thereof. She has also noted that the difference between the tare weight and gross weight represents only 1% of the total quantity of cement cleared during the period in dispute by the appellants and that such variations may arise on account of variation between two weighbridges, variation in the method of weighment etc. No satisfactory or acceptable arguments have been raised to dislodge the above findings. We, therefore, see no reason to interfere with the order of the Commissioner (Appeals). We accordingly uphold the same and reject the appeal.
10. In view of the boards circular as well as the prevision of Standards of Weights and Measures (Packaged Commodities) Rules 1977 and in view of the decision I find no infirmity in the impugned order. The appeals filed by Revenue are dismissed.
(Dictated & pronounced in open Court) (S.S. Kang) Vice President RM 1