Custom, Excise & Service Tax Tribunal
M/S Krishna Metal Industries vs Cce, Delhi Ii on 18 October, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV Excise Stay Application No. 55979 of 2013 in Appeal No. 55726 of 2013 (SM) [Arising out of the Order-in-Appeal No. 91/CE/D-II/2012 dated 25/10/2012 passed by The Commissioner (Appeals), Central Excise, New Delhi.] For Approval and signature : Honble Shri 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 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? M/s Krishna Metal Industries Appellant Versus CCE, Delhi II Respondent
Appearance Shri Naveen Mullick, Advocate for the appellant.
Shri Davinder Singh, Authorized Representative (Jt. CDR) - for the Respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) DATE OF HEARING : 18/10/2013.
Final Order No. 58104/2013 Dated : 18/10/2013 Per. Rakesh Kumar :-
The fact leading to this appeal and stay applications are, in brief, as under.
1.1 The appellant are manufacturers of copper ingots from copper scrap. It appears that they had obtained Central Excise licence in 1996 but they were filing nil return for the last three years and for this reason, their factory was visited by the Jurisdictional Central Excise officers on 3rd June 2006 and the stock of the raw material and finished goods was checked. It was found that while the RG-1 register was written upto only 30th April 2006 showing nil balance, in the bonded store room of the factory, there was stock of 3961 kgs. of copper ingots which obviously had not been entered in the RG-1 register. Shri Shankar Somany, Proprietor of the appellant firm, who was present at that time stated that the quantity of copper ingots found in the factory represents 3 to 4 days production and that the same could not be entered in the RG-1 register as, on account of non-availability of the workers, the ingots could not be weighed. After issue of the show cause notice, the matter was adjudicated by the Assistant Commissioner who ordered confiscation of the excess unaccounted stock under Rule 25 (1) of the Central Excise Rules with option to be redeemed on payment of redemption fine and beside this, imposed penalty of Rs. 50,000/- on the appellant firm. On appeal being filed to Commissioner (Appeals) against this order, the same was upheld vide order-in-appeal dated 08/10/09 against which the appellant filed an appeal before the Tribunal. The Tribunal vide final order No. 855/2010-SM dated 20th July, 2010 remanded the matter to the original Adjudicating Authority for denovo adjudication after granting opportunity of personal hearing. In denovo proceedings the Assistant Commissioner vide order-in-original dated 02/09/11 again ordered confiscation of the unaccounted stock of copper ingots and with option to be redeemed on payment of redemption fine in lieu of confiscation of Rs. 1,20,000/- and beside this, imposed penalty of Rs. 1,96,379/- on the appellant under Rule 25 of the Central Excise Rules readwith Section 11AC. On appeal being filed to Commissioner (Appeals) against this order, the Commissioner (Appeals) vide order-in-appeal dated 25/10/12 upheld the Assistant Commissioners order against which this appeal has been filed alongwith stay application.
2. Though this matter today is listed for hearing of the stay application, since only a short issue regarding confiscation of the goods and imposition of penalty is involved, the Bench was of the view that the matter can be heard for final disposal. Accordingly, with the consent of both the sides, the requirement of pre-deposit is waived and the matter is heard for final disposal.
3. Shri Naveen Mullick, Advocate, the learned Counsel for the appellant, pleaded that since 2002 the unit was closed and had re-started the production in 2006, that at the time of officers visit to the factory on 3rd June, 2006, there was stock of 3961 kgs. of copper ingots, that this stock could not be entered in the RG-1 register as, as clarified by Shri Shankar Somany, Proprietor of the appellant firm, on account of non-availability of the labour, the ingots could not be weighed even though a facility for this in the factory itself, that non-entry of the ingots, in stock, in the RG-1 register was not deliberate, that in view of this, the imposition of penalty of Rs. 1,96,379/- in addition to redemption fine of Rs. 1,20,000/- is too harsh, and that in the circumstances of the case the imposition of penalty under Rule 25 was not called for. He, therefore, pleaded that the impugned order upholding the penalty in addition to redemption fine and upholding the confiscation of the goods is not correct.
4. Shri Davinder Singh, the learned Jt. CDR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and emphasised that the unit had been visited by the Central Excise officers only for the reason that for the last 3 to 4 years it was filing nil returns, that the fact that on 03/6/06, the RG-1 register was written upto 30th April 2006, while there was stock of 3961 kgs. of copper ingots, itself shows that the appellant was deliberately not accounting for the production of finished goods in the RG-1 register, that there was no record of purchase of the raw material, that looked in this background, the non-accountal of the finished goods in the RG-1 register would imply that this was done with intent to evade the payment of duty and that in the facts and circumstances of the case, there is no infirmity in the impugned order.
5. I have carefully considered the submissions from both the sides and perused the records.
6. It is not denied that at the time of officers visit to the factory on 03/6/06, the RG-1 register was found written only upto 30th April, 2006 and the same was showing nil balance. It is also not denied that on the visit of the Central Excise officers they found that there was stock of 3961 kgs. of copper ingots representing 3 to 4 days production and the same had not been entered in the RG-1 register. There is thus contravention of the provisions of Rule 10 of the Central Excise Rules according to which every manufacturer has to maintain stock account of finished goods manufactured by him on daily basis in the RG-1 register. In view of this, the stock of copper ingots not accounted for in the RG-1 register has been correctly confiscated under Rule 25 (1) (a) of the Central Excise Rules and penalty has been correctly imposed on them under this Rule. However, looking to overall facts and circumstances of the case, the penalty on the appellant company is reduced to Rs. 50,000/- (Rupees Fifty Thousand). The appeal, therefore, is partly allowed.
(Pronounced in the open court.) (Rakesh Kumar) Member (Technical) PK ??
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