Custom, Excise & Service Tax Tribunal
Grover Steel Rolling Mills, C.C.E. ... vs C.C.E. Meerut Ii, Grover Steel Rolling ... on 22 November, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH : ALLAHABAD COURT No. I APPEAL No.E/3055,4086/2010-EX[SM] (Arising out of Order-in-Appeal No.260-CE/MRT-II/2010 dated 23/08/2010 passed by Commissioner(Appeals), Customs & Central Excise, Meerut-II) Grover Steel Rolling Mills, C.C.E. Meerut II Appellant(s) Vs. C.C.E. Meerut II, Grover Steel Rolling Mills Respondent(s)
Appearance:
Shri Rajesh Chhibber (Adv) for Appellant Shri Mohd. Altaf, (AC) (AR) for Respondent CORAM: Mrs. Archana Wadhwa, Honble Member (Judicial) Date of Hearing : 22/11/2017 Date of Decision : 22/11/2017 FINAL ORDER NO-71691-71692/2017 Per: Mrs. Archana Wadhwa:
The appellant is engaged in manufacture of flats out of ingots. There factory was visited by the officers on 26.08.2008, who conducted the various search and verifications. As a result of stock taking, the ingots as also MS Flats were found in excess than the recorded balance in RG-1 statements. The statement of the appellants authorized representative was recorded wherein he admitted such excesses but submitted that the same were not meant for clandestine removal.
2. On the above basis, proceedings were initiated against them by way of issuance of a show cause notice dated 26.02.2009 proposing confiscation of the excess found raw material as also MS Flats. The notice culminated into an order passed by the Original Adjudicating Authority confiscating the inputs with an option to the appellant to redeem the same on payment of redemption fine of Rs.5,00,000/-. Similarly excess found final product was also confiscated with an option to redeem on payment of redemption fine of Rs.15,00,000/-. Penalty of Rs.20,00,000/- was imposed under Rule 25 of Central Excise Rules, 2002. On appeal against the above order, Commissioner (Appeals) upheld the confiscation but reduced the redemption fine and penalty to Rs.7,50,000/- and to Rs.5,00,000/- respectively. The said part of the order is appealed by the Revenue whereas assessee is in appeal against the order of confiscation and imposition of penalty.
3. The contention of the learned advocate is that even if there were excesses, which according to them were not real, the confiscation of the same were upheld in the absence of any evidence to show that the appellant was either in the process of clearing the same without payment of duty or the same were intended to be cleared clandestinely. He also submits that the confiscation of the raw material cannot be appreciated inasmuch as there is no provision to confiscate the raw material. Elaborating on his argument he submits that the final product is entered in their RG-1 register, on the basis of the sectional weight and even if there is a minor variation in the same, it would result in huge differences in the total weight of the goods. By drawing my attention to various decisions he submits that confiscation or imposition of penalty be set aside.
4. After hearing learned AR and after going through the impugned order I find that apart from the fact that there were excess of goods in the assessees factory, which in any case is being assailed by the assessee, I note that there is virtually no other evidence to show that such excess production was not recorded in RG-1 register with a madafide intention to clear the same without payment of duty. Tribunal in the case of Jitendra Agarwal & Kay Cee Electricals Vs. Commissioner of Central Excise, New Delhi : 200 (117) E.L.T. 208 (Tri.) has observed that raw material not accounted for in Form IV Register after their receipt in appellants factory cannot be confiscated on the mere allegation that the same were kept for clandestine removal. Further, in the case of Nitin Ispat (P) Ltd. Vs. Commissioner of Central Excise, Lucknow : 2014 (306) E.L.T. 487 (Tri. Del.), it was observed that in the absence of any inculpatory statement to the effect that the goods were not accounted with a malafide intention to clear in the absence of the same, confiscation of the same and imposition of penalty would not be justified. In support he relied upon majority decision of the Tribunal in the case of Bhillai Conductors Pvt. Ltd. Vs. Commissioner : 2000 (125) E.L.T.781 (Tri.) as also in the case of A. Kumar Industries Vs. Commissioner : 2010 (261) E.L.T. 486 (Tri.). Reliance was also made to Honble Punjab & Haryana High Court decision in the case of Commissioner of Central Excise Vs. AAR KAY Industries : 2015 (319) E.L.T. 263 (Punjab & Haryana) wherein setting aside of penalty by the Tribunal in respect of the goods which were still lying in the factory premises and have not been removed, was upheld.
5. Inasmuch as in the present case, there is no evidence reflecting upon the fact that said goods were not entered in the statutory records with a malafide intention to remove the same, I find no justifiable reasons for confiscating the same or to impose penalty upon the assessee. Accordingly, the impugned orders are set aside and appeal is allowed with consequential relief to the appellant.
6. Inasmuch as the assessees appeal is allowed in toto, Revenues appeal is accordingly rejected.
(Dictated and pronounced in Court) (Archana Wadhwa) Member (Judicial) GS 1 4 APPEAL No.E/3055,4086/2010-EX[SM]