Customs, Excise and Gold Tribunal - Delhi
Advance Pipe Ltd. And Shri R.K. Vij vs Cce on 15 February, 2006
Equivalent citations: 2006(106)ECC446, 2006ECR446(TRI.-DELHI)
ORDER
S.S. Kang, Vice President
1. The appellant filed these appeals against the order-in-appeal passed by the Commissioner (Appeals). In this case the demand of Rs. 9,53,126/- was confirmed and equal amount of penalty was imposed on the firm and Rs. 50,000/- on the Director of firm. The brief facts of the case are that the appellants are engaged in the manufacture of pipes i.e. galvanized and black. On 1.11.2000 the officers of Revenue department visited the factory of the appellant, on verification, it was found that there was shortage of inputs such as zinc and also shortage of their finished product i.e. pipes. The Revenue also seized two photocopy of invoice showing clearance of higher quantity of pipes whereas 3rd carbon copy of the two invoices shows only clearance of one pipe. The Revenue is also of the view that the appellant clearing the pipes declaring them as rusted and short length pipe at a lower price whereas prima quality of pipe was cleared.
2. The contention of the appellant in respect of zinc is that the zinc is used in the galvanization and there is certain quantity of zinc which otherwise remained in the galvanizing tanks. The contention is that the appellant were entering in their statutory record the consumption of the zinc only by counting the pipes which were galvanized on approximate basis, therefore, in fact, there was no short age of the zinc and there is also no evidence on record to show that the duty paid zinc on which credit has been taken is cleared as such. In respect of shortage of finished goods, the contention is that the weight was taken on the average basis and which cannot be considered as actual weight, It is also pointed out that pipes of assorted size and length were also weight on approximate basis. The contention is that as the weight of the existing stock was taken into consideration on average basis, therefore, on the weight which is arrived at by the average basis cannot be made basis to show that there is shortage of finished goods. In respect of copy of invoices which were recovered from the premises showing clearance of higher quality of pipes whereas the third and forth copy of invoice shows only clearance of one pipe. The contention is that their authorized signatory who is prepared these invoices was against the firm hence to harm the appellant made statement to create excise liability.
3. In respect of invoices under which the goods were shown to be cleared of short length and rusted, the contention is that in fact these goods were cleared on payment of appropriate duty. The Revenue is asking for duty on the ground that earlier the appellant cleared the pipes without payment of duty and these invoices are only cover up. The contention is that if the goods were cleared without payment of duty earlier there is no need for cover up and payment of subsequent duty, The appellant also submitted that there is no evidence on there is no evidence on record to impose penalty on the Director, therefore, the demand and penalty is not sustainable.
4. We have heard the Id, SDR and perused the record.
5. We find in this case the physical stock taking of inputs and final products was taken by the Revenue in the presence of representative of the appellant, the zinc on which credit has been taken found short? The contention of the appellant that some quantity of zinc in the galvanized tank was not taken into consideration and they were entering the consumption of zinc on average basis. We find that as the appellant has availed the credit in respect of zinc which is used in the manufacture of final product hence they are liable to account for the same. As the appellant failed to give convincing explanation regarding the shortage, therefore, we find no merit in the contention of the appellant in this regard.
6. In respect of shortage of finished goods, we find that the stock taken report prepared by the Revenue shows that one pipe from each bundle were taken out for weighment and on the basis of that weight the weight of bundics was arrived at. This is in respect of all size of pipes and a detailed physical stock taking report was prepared showing the separate weight of each size of pipe. In the report it is specifically mentioned that actual weight of pipe of each size was taken from the each bundle and that multiplied with the total number of such size to arrive at the total weight: of each size as suggested by Director of the appellant firm. In these circumstances, we find no merit in the contention of the appellant that shortage was arrived at on average basis.
7. In respect of the copy of invoices which shows clearance of higher quantity of goods whereas the third and forth invoice shows the clearance of only one pipe. The contention of the appellant that this was done by an employee who was inimical to the appellant is not convincing explanation as the copy of invoice was recovered from the premises as well as the third and fourth copy of the same invoices shows different particulars.
8. In respect of the demand of Rs. 2,10,379/-, we find that the appellant cleared the goods showing in the invoices as rusted of short length pipes and paid appropriate duty, The contention of the Revenue is that the appellant cleared the prime quality of pipes by showing the lower value to pay less duty, We find that when the Revenue is in possession of invoices where the name of the customer is their and no verification was conducted from the customer regarding the quality of goods, therefore, this demand is merely on the basis of presumption and assumption which is not sustainable and set aside.
9. Keeping in view the facts and circumstances of the case, we find that the Commissioner (Appeals) has already reduced the penalty to Rs. Two lakhs as we are setting aside the demand of approximately Rs. Two lakhs, therefore, the penalty is further reduced to Rs. 1.5 lakhs. In respect of personal penalty on the Director, we find Commissioner (Appeals) has already reduced to Rs. 10,000/-. In view of the facts discussed as above, we find that the penalty on the Director does not call for further interference. The appeals are disposed of as indicated above.
(Dictated and pronounced in open Court on 15.2.06)