Custom, Excise & Service Tax Tribunal
Suraj Plastic Industries vs Cce, Delhi-I on 16 January, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
COURT NO. III
Excise Appeal No.3273 of 2009 & 226 of 2010
[Arising out of Order-In-Appeal No.190-191/CE/DLH-I/2009, dated 24.09.09 issued by CCE, Delhi-I]
For approval and signature:
Honble Ms. Archana Wadhwa, Judicial Member
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?
NO
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?
YesT.S.Poly Plast P.Ltd.
Suraj Plastic Industries Appellants
Vs.
CCE, Delhi-I Respondent
& vice-versa Coram: Honble Ms. Archana Wadhwa, Judicial Member Appearance:
Shri S.Sunil, Adv. for the Appellants (for E/226/2010) Shri R.K.Mathur, DR for the Respondent Date of Hearing : 06.11.2012 FINAL ORDER NO.A-55208/2013,A-55209/2013 Per Ms. Archana Wadhwa:
Two appeals filed by the M/s T.S.Poly Plast P.Ltd. and another by Revenue against M/s Suraj Plastic Industries as respondent are being disposed of by a common order as they arise out of the same impugned order passed by Commissioner(Appeals).
2. After hearing both the sides, I find that M/s Suraj Plastic Industries is engaged in the manufacture of PVC compound and PVC sleeve. During the visit of factory of the said assessee, 69 begs of 25 kg. each of PVC resin bearing brand LG were found lying on the floor. As Shri Shashi Kant Tiwari, Accountant present during the course of visit failed to produce any document for the lawful possession of the said goods, the same were seized by the officers vide Panchnama dtd. 23.09.05. Shri Tiwari also stated that the said goods were procured by them from M/s T.S.Poly Plast P.Ltd. against Bill No.54 dtd. 15.09.05. However, the said bill showed the goods as Chem Plast brand of PVC resin. Shri Tiwari in his statement deposed that he has never received PVC resin of Chem Plast brand during the period August, 2004 to 23.09.05.
3. As a consequence, the premises of M/s T.S.Poly Plast P.Ltd. which is a registered dealer was also put to search and shortages of 3525 kg. of PVC resin was found as compared to balance in RG23-D register. The statement of Shri Tarvinder Singh, Director of the said assessee was recorded wherein he admitted the shortages and deposed that they are on account of reasons that sometimes, they had sold PVC resin in cash for which no invoices were issued. He also stated that they had sold only Chem Plast brand PVC to M/s Suraj Plastic Industries.
4. Statement of Shri Shiv Kumar Singhal, Proprietor of M/s Suraj Plastic Industries was also recorded stating that they have only received LG brand PVC resin against the invoices issued by their registered dealer.
5. On the above basis, Revenue initiated proceedings by way of issuance of a Show Cause Notice dtd. 20.03.06 proposing to deny the entire credit availed by M/s Suraj Plastic Industries during the period August, 2004 to 23.09.05. Notice also proposed imposition of penalty on both the assesses. The original adjudicating authority confirmed the demand as proposed in the notice and imposed penalties.
6. On appeal against the said order, Commissioner (Appeals) allowed the appeal of M/s Suraj Plastic Industries by setting aside the demand confirmation for the period May, 2005 to September, 2005 and confirmed the denial of Cenvat credit of Rs.17,736/- involved in respect of 69 bags of 25 kg. each of PVC resin of LG brand found at the factory premises of the said appellant and set aside the remaining demand of Cenvat credit of Rs.3,87,065/-. However, he upheld the confiscation of seized goods with an option to M/s Suraj Plastic Industries to redeem the same on payment of redemption fine of Rs.30,000/-. However, the appeal of M/s T.S.Poly Plast P.Ltd. challenging imposition of penalty of Rs.1,50,000/- under Rule 25 of Central Excise Rules, 2002 was rejected.
7. Revenue is in appeal against that portion of the order of Commissioner(Appeals) vide which he has granted relief to M/s Suraj Plastic Industries. The other appeal is by M/s T.S.Poly Plast P.Ltd. challenging penalty of Rs.1,50,000/-
8. While dealing with the Revenues appeal, I find that the same is against that part of the order of Commissioner (Appeals) vide which he has allowed the appeal of M/s Suraj Plastic Industries and has set aside the confirmation of Cenvat credit. The said credit was denied by the Revenue on the ground that even during the past period, the appellant has received LG brand PVC in the guise of PVC resin of Chem Plast brand. The appellate authority has observed that such interchange of brands stands accepted by M/s Suraj Plastic Industries in respect of 69 bags which were found at their premises. However, similar allegations does not hold ground in respect of the entire quantity of said inputs of PVC resin supplied by the dealer during the past period in as much as the same is mainly based on uncorroborated statement of Shri Shashi Kant Tiwari, Accountant and Shri Singhal, Proprietor. He also observed that these statements are contrary to the statement of Shri Tarvinder Singh. In as much as there is no other evidence placed on record by the deptt. to corroborate the statement of Accountant and Proprietor, the allegation that they have received LG brand resin from the supplier instead of Chem Plast brand PVC resin mentioned in the invoices cannot be held to be valid.
9. I find force in the above reasoning of Commissioner (Appeals). Revenue in their memo of appeal has also not advanced any further evidence to reflect to the contrary. As such I find no merits in the Revenues appeal, the same is accordingly rejected.
10. As regards appeal of M/s T.S.Poly Plast P.Ltd., the challenge is to penalty of Rs.1.50 lakhs imposed upon them on the ground that during the visit of the officers, there were shortages of goods, viz-a-viz entries in their RG-1 register. The appellants contention is that as per the statement of Shri Tarvinder Singh, the goods were sold by them in cash and there is no bar in selling the goods in cash. Only fault is that the entries were not made in the RG-1 register. In any case contention of the said appellant that penalty stands imposed under Rule 25 which prescribes minimum penalty of Rs.2,000/- and maximum penalty equivalent to duty payable on goods in respect of which there is contravention. In as much as the duty involved in the short found goods is to the tune of Rs.35,532/-, the maximum penalty imposed cannot exceed the said amount.
11. I find that the said appellant has not disputed shortage of the goods. However, Shri Tarvinder Singh has deposed in his statement that the goods were sold in cash. If that be so, the recipient of the goods cannot avail the Cenvat credit. As such it is not the case where Cenvat credit stands wrongly passed on to the buyers. As rightly contended by the said appellant, the only contravention on their part was making non-entry in their RG23D register. Imposition of penalty to the extent of Rs.1.50 lakhs for the said contravention is neither justified nor fair nor in accordance with the provisions of Rule 25 which provide maximum penalty equivalent to duty involved in respect of the goods contravening provisions. As such while upholding that the appellant is liable to be imposed with penalty for contravening of the provisions of law, I reduce the penalty to Rs.35,532/-, i.e., equivalent to the duty involved in respect of short found goods.
12. The appeal of M/s T.S.Poly Plast P.Ltd. is disposed of partially and the appeal of Revenue is rejected. Both the appeals are disposed of in above manner.
(Pronounced in the open Court on 16.01.13)
(Archana Wadhwa) Member(Judicial)
RK-I
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