Customs, Excise and Gold Tribunal - Calcutta
Bengal Pipe Industries vs Commissioner Of Central Excise, ... on 6 February, 2002
Equivalent citations: 2002(143)ELT79(TRI-KOLKATA)
ORDER Archana Wadhwa, Member (J)
1. The appellants are engaged in the manufacture of MS Black Pipes falling under Chapter 73 of Central Excise Tariff Act, 1985. The appellants' factory was visited by the Central Excise Officers on 10-6-98 and various checks were conducted and verifications made. As a result of stocktaking of raw materials and final products, it was found that raw material was in excess to the extent of 1.89 M.Ts. and there was shortage of 16.43 M.Ts. of final product than the recorded balance in the statutory books of accounts. The various records maintained by the appellants (statutory as well as private) were taken into possession by the Central Excise Officers. Shri Ratan Lal Agarwal, partner of the appellant company, in his statement given before the Officers admitted the shortages and the excesses as also the fact that there were clearances by their Company without payment of duty. Ho also tendered a cheque of Rs. 2.5 lakh on 17-6-98 towards the alleged shortages and clearances without payment of duty. Based upon the above facts, proceedings were initiated against the appellants proposing to confirm the demand of duty of Rs. 1,77,207.00 as the duty not paid in respect of the clandestinely cleared goods. The allegations were based upon the examination of a private small note-book recovered from the appellants' premises and the comparison of the entries made therein with the entries made in the statutory records for receipt of the raw materials and removal of the finished products. On such a comparison, it was noticed that the entries did not correspond with the entries made in statutory accounts. An amount of Rs. 35,837.00 was proposed to be confirmed in respect of the final product found short during stock-verification. The notice also proposed imposition of personal penalty and confirmation of entries.
2. On adjudication, the appellants could not satisfy the adjudicating authority in respect of a particular quantity of goods by production of evidence that the same were the trading goods and were sent for repair/reconditioning work. By accepting the appellants' stand, the demand pertaining to 45893 Kgs. and 22695 Kgs. of goods was dropped by the Assistant Commissioner. However, in respect of 11235 Kgs., the appellants could not produce any evidence showing clearance of the same on payment of duty or by production of any evidence that the same were the traded goods. Accordingly, the adjudicating authority confirmed the demand of duty of Rs. 29,942.00 in respect of the said quantity of the goods. He also confirmed the demand of duty of Rs. 35,837.00 in respect of the goods found short than the recorded balance in RG-I register. Penalty of an equivalent amount was imposed upon the appellants along with the confirmation of interest under the provisions of Section 11AC Appeal against the above Order did not succeed before the Commissioner (Appeals). Hence the present appeal.
3. I have heard Shri P.M. Sen, learned Consultant for the appellants and Shri A.K. Mondal, learned JDR for the Revenue.
4. As regards the confirmation of demand of duty in respect of the goods allegedly cleared without payment of duty based upon the entries made in the records recovered from the appellants' factory, it is seen that the appellants have only submitted that the said note-book was recovered from the gateman and did not belong to them. In my view, the said stand of the appellant company has been rightly rejected by the lower authorities. Apart from the fact that some of the entries made in the said seized records have been found to be reflected in the statutory books/ which fact proves that the records belonged to the appellants, there is nothing on record to show that the note-book has been recovered from the gateman except a bare statement at the time of filing of the feply to the show cause notice by the appellants. Inasmuch as the appellants have failed to explain the entries made in the said note-book relatable to 11,235 Kgs. of MS Black Pipes, the authorities below have rightly concluded that they have been removed clandestinely. This fact also gets corroborated by the statement of the partner of the appellant company tendered before the Officers immediately after the seizure. The said statement is in the handwriting of Shri Agarwal and the subsequent retraction by him, has been rightly held to be a mechanical retraction by the authorities below.
5. As regards the duty of Rs. 35,837.00 confirmed in respect of the final product found short during the visit of the Officers, I find that the stock-verification report was duly signed by the appellants' representative and no objection was raised thereagainst. Even the appellants have not tried to explain the shortages immediately after the visit of the Officers. As such, I am of the view that the confirmation on this count, is also justified. The same is accordingly upheld.
6. Shri Sen, learned Consultant has, however, prayed for reduction in penalty and has relied upon the Tribunal's decisions in the case of Escorts JCP Ltd. v. Commissioner reported in 2000 (118) E.L.T. 650 (Tribunal) and in the case of Commissioner of Central Excise, Delhi v. Mauria Udyog Ltd. reported in 2001 (131) E.L.T. 248 (Tribunal), in support of his contention that Section 11 AC of Central Excise Act, 1944 only provides the maximum limit of penalty and it is not mandatory that the penalty should be equal to the duty amount. By applying the ratio of the said decisions to the facts of the present case, I reduce the total quantum of personal penalty of Rs. 60,779.00 (Rupees sixty thousand seven hundred seventy nine) to a sum of Rs. 30,000.00 (Rupees thirty thousand). But for the above reduction in the quantum of personal penalty, the appeal is otherwise rejected.