Custom, Excise & Service Tax Tribunal
M/S Chinttpurni Engineering Work (P) ... vs Cce, Lucknow on 20 August, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing/Order : 20.8.2014
Appeal No. E/438/2012-EX(SM)
[Arising out of Order-in-Appeal No. 407-CE/LKO/2011 dated 28.11.2011 passed by the Commissioner (Appeals), Customs, Central Excise & Service Tax, Lucknow]
For Approval & Signature :
Honble Mr. R.K. Singh, Member (Technical)
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?
M/s Chinttpurni Engineering Work (P) Ltd. Appellant
Vs.
CCE, Lucknow Respondent
Appearance:
Shri S.K. Pandey, Advocate - For the Appellant Shri Sanjay Jain, A.R. - for the Respondent Coram : Honble Mr. R.K. Singh, Member (Technical) F. Order No.53288/2014 Per R.K. Singh :
This appeal has been filed against the Order-in-Appeal No. 407-CE/LKO/2011 dated 28.11.2011 in terms of which the Order-in-Original No. 01/DEM/CEX/LKO-II/11 dated 18.1.2011 has been upheld. In terms of the said order-in-original, the duty demand of Rs.2,74,976/- with interest has been confirmed on the quantity of certain finished goods found short at the time of investigation by Central Excise officers along with equal amount of penalty. Redemption fine of Rs.9,59,625/- has also been imposed on certain finished goods found in excess.
2. The appellants have contended that the said discrepancy was caused due to the mental stress of the concerned officer in charge of maintaining the statutory records because his wife and son had disappeared. They referred to the judgment in the case of Ranasaria Polypack Pvt. Ltd. Vs. CCE, Ahmedabad 2009 (247) ELT 700 (Tri.-Ahmd.) in their support. The ld. Advocate also referred to the judgment in the cases of CCE Vs. S. Channi Steel Pvt. Ltd. 2010 (260) ELT 174 (P&H) and CCE Kanpur Vs. Minakshi Castings 2011 (274) ELT 180 (Alld.).
3. The ld. A.R. stated that in this particular case Panchnama was prepared as per methodology given by the appellants and the appellants in his statement admitted the existence of shortage and excess of respective goods. The ld. AR cited judgement in the case of J.C. Rolling Mills Pvt. Ltd. Vs. CCE, Kanpur - 2012 (276) ELT 254 and CCE, Indore Vs. Kashyap Sweetners Ltd. 2006 (193) ELT 108 (Tri.-Del.) in this regard.
4. I have considered the submissions of both the sides. It is seen that Panchnama clearly brings out the shortage as well as excess of the respective goods vis-a-vis. their statutory records. As regards the contention of the appellants that the discrepancy was due to the mental stress of the person who maintained the statutory records as he was disturbed because of the disappearance of his wife and son, the ld. Advocate admitted that he is not aware when this disappearance took place or whether any FIR was lodged with the Police. Even if this contention is taken on record, the mistake in the accounts can be corrected and the appellants would have submitted the corrected version of the statutory records to explain the discrepancy if the discrepancy was indeed because of mistake in the accounts. It is evident that no such corrected accounts were submitted to explain the shortage/excess which shows that the alleged excess/shortage was real and not merely a consequence of mistake in the accounts. The appellants also admitted the said shortage/excess and the Panchnama recording the said excess/shortage has never been questioned by the appellants. The CESTAT judgement in the case of Ranasaria Polypack Pvt. Ltd. (supra) cited by the appellant deals with different facts as in that case CESTAT found that it was impossible for the officers to carry out the stock taking in such a short span of time. In the present case there is no such situation averred. The appellants also cited judgement of Allahabad High Court in the case of CCE, Kanpur Vs. Minakshi Castings 2011 (274) ELT 180 (Alld.) wherein it has been held that shortages of finished goods, without evidence of clandestine removal does not lead to inference of evasion of duty and no penalty is imposable but in that case the assessee had not contested the demand of duty and paid the same and the Honble High Court took notice of this fact. In the case of CCE Vs. S. Channi Steel Pvt. Ltd. (supra), the goods were finally accounted for as a result of corrections.
5. It is seen that the goods involved in this case are steel items. The shortage/excess found are substantial and that there is no plausible explanation whatsoever put forth explaining the same so far. There is no assertion that the accounts were incorrectly maintained or that the Panchnama was defective. The goods involved are such that they cannot disappear due to natural factors. The shortage/excess were clearly admitted by the appellants and the Panchnama certifies the same.
6. In the circumstances it is axiomatic that as admitted by the appellants, such shortage can be caused only by removal of the goods. It is not a mere conjecture but an undeniable fact that shortage of the goods, in the absence of any other reason, can be caused only by their removal. The excess of certain finished goods found is also a matter of fact which is not disputed. None of the case laws cited by the appellants deal with such facts where the assessee has admitted the offence, not retracted the statement, the Panchnama is proper and not questioned at any stage as suffering from any infirmity and there has been no accounting mistake. In the case of CCE, Indore Vs. Kashyap Sweetners Ltd., the CESTAT Delhi inter alia held as under:
4.?I have heard both the sides and gone through the record. The facts are not much in dispute. The officers of the Central Excise visited the factory premises of the respondents on 17-12-97 wherein they were engaged in the manufacture of solvent oil. On carrying out the stock verification of the raw-material, shortage involving Modvat credit of Rs. 43,830/- was found and this fact was admitted at the spot by the authorised signatory of the appellants who was present there at that time. The respondents accordingly even reversed the Modvat credit. Ld. Commissioner (Appeals) has dropped the recovery of the amount on the ground that the shortage was explained by the respondents and there was no evidence to prove the clandestine removal of the raw-materiel as such. But the view taken by him in my view is totally erroneous in law. The authorised representative of the respondents did not offer any explanation when his statement was recorded by the officers in the factory. He admitted the shortage of the raw materials and the respondents acting on his admission, even reversed the Modvat credit. In such a situation, it was not required by the Deptt. to prove clandestine removal of the raw-material as such by the respondents. The burden was rather on the respondents to explain the shortage and after having failed to do so, they themselves accepted their liability and accordingly reversed
7. In the light of the foregoing I find no infirmity in the impugned order. The appeal is therefore rejected.
(Dictated & pronounced in open Court) (R.K. Singh) Member (Technical) RM 1