Custom, Excise & Service Tax Tribunal
Cce, Indore vs M/S. Parda Steels Pvt. Ltd on 20 October, 2009
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
COURT - I
Excise Appeal No. E/675/05
[Arising out of Order-in-Appeal No.298-CE/IND/APPL-II/03 passed by the Commissioner (Appeals-II), Indore].
Date of Hearing:20.10.2009
Date of decision:20.10.2009
For approval and signature:
Honble Mr. Justice R.M.S. Khandeparkar, President
Honble Mr.Rakesh Kumar, Member (Technical)
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2 Whether it should 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 Departmental authorities?
CCE, Indore Appellant
Vs.
M/s. Parda Steels Pvt. Ltd. Respondent
Present for the Appellant : Shri S.Gautam, DR
Present for the Respondent : None
Coram: Honble Mr.Justice R.M.S. Khandeparkar, President
Honble Mr. Rakesh Kumar, Member (Technical)
ORAL ORDER NO. _______________ DATED:20.10.2009
PER: JUSTICE R.M.S.KHANDEPARKAR Shri. S. Gautam, Departmental Representative present for the appellant. None present for the respondent.
2. This appeal arises from order dated 16th July 2004 passed by the Commissioner (Appeals), Indore, whereby the appeal field by the respondent against the order of the original authority has been set aside. Under order dated 20th July 2000, the Joint Commissioner, Indore had confirmed the liability of excise duty on the respondent amounting to Rs.5,18,093 alongwith interest thereon and had also imposed penalty of equal amount under section 11AC of the Central Excise Act 1944 and further penalty of Rs.1.00 Lakh under Rule 173Q of Central Excise Rules 1944 for the contravention of Rule 52 A, 9(1) 53, and 173 G of the Central Excise Rules 1944.
3. The respondents herein are engaged in the manufacture of MS bars, CTD bars and other rolled products of iron and steel classifiable under Chapter 72 of the Central Excise Tariff Act 1985. In the course of surprise visit to the factory premises of the respondents on 7th of December 1996, by the Preventive Officers of the Central Excise Department and on verification of records and the stock at the factory premises in the presence of Panchas, it was revealed that stock of finished goods that is MS /CTD bars was short of 290.248 MT. Consequently, the investigation was conducted and on completion thereof, a show-cause-notice dated 17th June, 1999 came to be issued to the respondent which was adjudicated upon and the said order dated 28th July 2000 came to be passed. The matter was carried in appeal before the Commissioner (Appeals) wherein the order of the original authority was set aside. Hence, the present appeal.
4. The ld. AR while assailing the impugned order submitted that the Commissioner (Appeals) erred in holding that the verification of the stock was not done physically and in contravention of the law laid down by the Tribunal contrary to the decision of Collector vs. Nagpal Steel (P) Ltd. reported in 1995 (79) ELT 462. He further submitted that the Commissioner (Appeals) also erred in holding that the Department could not have invoked the extended period of limitation. According to the ld. DR, the records clearly disclose that verification of stock was conducted under Panchnama in the presence of 2 Panchas and respondents representative and the said point was never disputed. On the contrary the authorized signatory of the respondent had clearly admitted the same in his statement under section 14 of the said Act. He further submitted that once the factum of suppression of the relevant material leading to clandestine removal of the finished product by the respondent having been established, the provisions of section 11AC of the said Act were clearly attracted and, therefore, the Department was justified in invoking the extended period of limitation.
5. Since none has appeared for the respondent, we have gone through the entire records placed before us with the assistance of ld. DR and on perusal thereof, it is seen that the adjudicating authority on detailed analysis of the materials on record had arrived at a clear finding that the stock of the finished product was verified in the presence of 2 independent Panchas as well as Representative of the respondent and at no point of time any sort of protest was raised on behalf of the respondent in that regard and on the contrary the shortage as calculated by the Department was clearly admitted by the respondent and even part payment of duty in relation to the goods clandestinely removed was maid by the respondent. Indeed, in the statement recorded under section 14 of the authorized signatory of the respondent to a question whether he would accept or not the fact that on 7th December 1996 in the presence of the independent witnesses stock of finished goods and raw-material was physically verified and shortage of 290.248 MT finished goods was found, it was specifically answered by the authorized signatory that Yes, I accept it and the same was never challenged or disputed by the respondent. In other words, the fact that the factory premises were inspected on 7th of December 1996 in the presence of 2 Panchas and accordingly, the stock of raw-material as well as the finished product was physically verified and based on such physical verification, the shortage of finished product was ascertained and it was confirmed by the authorized signatory of the respondents were clearly established by the Department. In such circumstances, one wonders as to how Commissioner (Appeals) merely on the ground that weighment has not been done by following the procedure as followed for weighment for truck could disbelieve the facts which were established by a cogent evidence produced by the Department and undisputedly admitted by the respondents. This clearly disclose failure on the part of the Commissioner (Appeals) to analyze the materials on record in proper perspective and, therefore, the finding arrived at by the Commissioner (Appeals) about failure on the part of the Department to establish the factum of clandestine removal of the finished product cannot be sustained and is liable to be set aside. The unchallenged clear evidence brought on record in relation to clandestine removal of the goods by the respondent, therefore, clearly justified the order passed by the original authority demanding the duty and imposing the penalty of equal amount.
6. Once the Department was able to establish that there was clandestine removal of the finished product by the respondent with the intention to evade payment of duty, as rightly submitted on behalf of the appellant, the provisions of section 11AC were clearly attracted. There was suppression of fact of removal of the finished product without payment of excise duty and thereby contravention of provisions of the Act with intent to evade payment of duty. There was no explanation placed on record by the respondent regarding clandestine removal of such goods. The dispute regarding absence of physical verification was sought to be raised only in the course of argument before the authorities. Even in the reply filed to the show cause notice, there is no categorical assertion on the part of the respondent that there was no physical verification or that the calculation arrived at regarding the shortage was without any basis. Being so, the Department was clearly justified in invoking the extended period of limitation.
7. In Nagpal Steel (P) Ltd. case, it was clearly noticed that the authority had sought to ascertain the weight of each ingot by dividing the weight of truck load of the ingots by the number of ingots. There was nothing to establish that each ingot was of equal weight. The authorities merely proceeded on anassumption that generally in steel industry, the average weight of ingots is taken and recorded in statutory records. In those circumstances, the Tribunal held that the method of weighment adopted by the authorities in Nagpal Steel Ltd. case was not correct. That is not the case in the matter in hand. Here is a case where the authorities had taken care to physically ascertain the actual shortage of the finished products and the same was duly confirmed by the authorized signatory representative of the respondent. Furthermore the facts that there was verification, that based on such verification there was calculation made to arrive at the figure of shortage and that the same was correct, were accepted by the authorized signatory of the respondent and the same was never disputed.
8. For the reasons stated above, therefore, the impugned order cannot be sustained and is liable to be set aside and the order passed by the Original authority to be restored. Hence, the appeal is allowed, the impugned order is set aside and the order passed by the Original Authority is restored with consequential relief. The appeal stands disposed of in above terms.
(JUSTICE R.M.S.KHANDEPARKAR) PRESIDENT (RAKESH KUMAR) MEMBER (TECHNICAL) Anita