Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs Unknown on 26 July, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT-II
Application No.E/S/641/10
Appeal No.E/682/10
Arising out of OIA No.54/2010/COMMR(A)/RAJ, dt.19.02.10
Passed by: Commissioner of Central Excise (Appeals), Rajkot
For approval and signature:
Honble Mr. B.S.V. Murthy, Member (Technical)
1. Whether Press Reporters may be allowed to see the No
Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the Yes
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
Appellant/s M/s. Priya Gold Ceramics
Represented by Shri Vipul Chandhar, C.A.
Vs.
Respondent/s CCE Rajkot
Represented by Shri J.S. Negi, SDR CORAM:
MR. B.S.V. MURTHY, MEMBER (TECHNICAL) Date of Hearing:26.07.11 Date of Decision:26.07.11 ORDER No. /WZB/AHD/2011 Per: Mr. B.S.V. Murthy:
Appellant is engaged in the manufacture of ceramic glazed tiles falling under Chapter Heading No.6906.10 of the Central Excise Tariff Act, 1985. During transit checks of the vehicles on 25.04.08, a truck carrying the goods manufactured by the appellant was intercepted and verification revealed that there was excess quantity of 400 boxes of ceramic glazed tiles in the truck for which though there was no corresponding central excise invoice. During the follow up action, factory of the appellant was visited and verification of the records revealed that daily stock account had not been maintained after 18.04.08 and officers proceeded to calculate the stock that should be available based on closing stock on 18.04.08, subsequent production and removals, found that there was an excess quantity of 21,018 boxes of ceramic glazed tiles in the factory. A penalty of Rs.1,38,205/- has been imposed under Rule 25 of Central Excise Rules, 2002 and redemption fine of Rs.1,92,700 has been imposed in respect of 21,018 boxes of ceramic glazed tiles found in excess. Hence the appeal.
2. The learned counsel submitted that there is no evidence to show that excess stock found during the visit of the officers was meant for clandestine removal. He relies upon the following decisions to submit that when excess stock is found, if there is no evidence to show that the same was meant for clandestine removal, such excess stock cannot be confiscated and penalty cannot be imposed.
1. Ganga Industries Vs. CCE Bhavnagar [2007 (209) ELT 140 (Tri. Ahmd.)]
2. CCE Hyderabad Vs. Srinivasa Frozen Foods Ltd. [2010 (262) ELT 594 (Tri. Bang.)]
3. Bhillai Conductors (P) Ltd. Vs. CCE Raipur [2000 (125) ELT 781 (Tribunal)]
4. A. Kumar Industries Vs. CCE Daman & Vapi [2010 (261) ELT 486 (Tri. Ahmd.)]
5. Vishal Malleables Ltd. Vs. CCE Surat [2009 (234) ELT 286 (Tri. Ahmd.)]
6. Citizen Extrusion (P) Ltd. Vs. CCE Surat [2007 (220) ELT 818 (Tri. Ahmd.)]
7. CCE Kanpur Vs. Ambica Poly Tubes [2010 (262) ELT 447 (Tri. Del.)]
8. Nilesh Steel & Alloys Pvt. Ltd. Vs. CCE Aurangabad [2008 (229) ELT 399 (Tri. Mumbai)]
3. Further, he also drew my attention to the appeal memorandum wherein appellant had recalculated the production based on daily production memos and submitted that the actual production comes to about 18,485 boxes whereas in the panchnama 14,498 boxes only have been taken. Further, he also submits that 825 broken and damaged boxes have not been taken into account. He also submits that while the learned Commissioner (Appeals) has accepted the submission made by the appellant that duty has been demanded wrongly on the basis of MRP and reduced the assessable value after giving abatement, he did not reduce the redemption fine and the penalty which should have been reduced.
4. The learned DR on the other hand submits that this is a clear case where the intention to remove clandestinely emerges in view of the fact that the excess stock was found during follow up action of the departmental officers after interception of a truck which was carrying unaccounted and un-invoiced ceramic tiles. Further, he drew my attention to the fact that in the statement recorded, it was brought out that appellant did not follow the instructions given by the Central Excise Department to indicate aggregate value of clearances in the invoice. This shows that appellant did not want to show the aggregate value because that would have disabled them from manipulation of invoices. Further, he also submits that the appellants representative had clearly accepted the existence of excess stock and had not disputed the quantum of excess stock till the adjudication proceedings started.
5. I have considered the submissions made by both the sides. As regards the decisions cited by the learned counsel, I find that in none of those cases cited above, the excess stock was found during a follow up action after interception of a truck carrying goods manufactured by the assessees and cleared without payment of duty and invoice. Therefore none of the decisions can be applied to the present case. The very fact that a truck was intercepted with 400 boxes extra which amounts to about 30% of the goods being transported in the truck would show that appellants did indulge in clandestine removal. Therefore the excess stock found has to be held as kept for clandestine removal. As regards the submission that the quantity has not been worked out correctly, it is found that the quantity of 18,485 boxes has been arrived at on the basis of production memos which were recovered during the visit of the officers to the factory. According to the learned counsel, even though this claim was made before both the lower authorities, both the lower authorities have rejected the claim observing that during the visit of panchas and drawing of panchnama, the excess stock was worked out was accepted by the representative of the company. The correctness or otherwise of the claim has not at all been examined. However in the same statement submitted by the appellants in the appeal memorandum it has also been shown that broken and damaged quantity as 825. On verification of production memo, it was seen that broken/damaged tiles are accounted in terms of Kgs whereas the statement in the appeal memorandum gives feeling that broken/damaged tiles are accounted in the boxes in the production memos which is definitely contrary to the facts. Therefore 825 boxes shown as broken/damaged has to be ignored. This results in the conclusion that the actual quantity found in excess may not have been 21,018 boxes. However, since this is only relevant for the purpose of calculation of redemption fine and penalty, I consider it not worthwhile remanding the matter for verification of this aspect only. Instead I intend to take a lenient view as regards penalty taking this factor into account. As regards the submission that the Commissioner (Appeals) did not consider the request for reduction in redemption fine and penalty, I find myself in agreement with the conclusion of the learned Commissioner that redemption fine and penalty are reasonable and need not be reduced if the quantity in excess found was taken into account and facts and circumstances of the case are considered. The reduction that I am making is only on account of the difference brought out by the learned counsel in the actual quantum of production based on production memos which I do not want to remand. Having regard to all the facts and circumstances as discussed above, I consider it appropriate that redemption fine imposed for release of the confiscated goods has to be reduced to Rs.1.25 lakhs and penalty to Rs.1 lakh. But for the above relief in quantum of redemption fine and penalty, the appeal is rejected.
(Dictated & Pronounced in Court) (B.S.V. Murthy) Member (Technical) jk 2