Custom, Excise & Service Tax Tribunal
M/S. Shivkripa Ispat Pvt. Ltd vs Commissioner Of Central Excise, Nasik on 15 October, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
Appeal No. E/365 to 367/08 - Mum
(Arising out of Order-in-Appeal No. CEX/AKD/41/APL/NSK/2008 dated 27.2.2008 passed by the Commissioner of Central Excise (Appeals), Nasik)
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should 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 : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
M/s. Shivkripa Ispat Pvt. Ltd.
Shri. Tilakraj Gupta
:
Appellants
Versus
Commissioner of Central Excise, Nasik
Respondents
Appearance Ms. Padmavati Patil, Advocate for Appellants Shri P.K. Agarwal, SDR for Respondents CORAM:
Honble Shri. Ashok Jindal, Member (Judicial) Date of Hearing : 04.09.09 Date of Decision : 15.10.09 ORDER NO.
Per : Ashok Jindal There are three appeals listed before me for disposal. Two appeals are filed by the assessee Company i.e. M/s. Shivkripa Ispat Pvt. Ltd. against the order of confirming duty demand along with interest and equivalent amount of penalty and the third appeal is preferred by Shri. Tilakraj Gupta, Director of M/s. Shivkripa Ispat P. Ltd. against the imposition of penalty of Rs.25,000/- under Rule 26 of Central Excise Rules, 2002.
2. The facts of the case are that the Preventive Officers of the Central Excise visited the factory premises of the appellants on 11.03.2004. During the physical verification of the stocks of finished goods as well as inputs under the panchanama, it was noticed that there was shortage in the stock of main input i.e. M.S. Ingots and the stock as per the input register maintained for accounting of M.S. Ingots were not tallied with the quantity of the inputs as well as the finished goods were found short which involves the availment of Cenvat Credit on the inputs and evasion of Central Excise duty on the finished goods. Show cause notice was issued to the appellants and duty demand along with interest and penalty was confirmed on account of clandestine removal and a Cenvat Credit of Rs.24,442/- was also disallowed to the appellant under Rule 12 of Cenvat Credit Rules, 2002 on the ground that original duty paid invoice was not produced. Penalty on the Director, Shri. Tilakraj Gupta was also imposed and the same was confirmed in the impugned order. Aggrieved by the same the appellants are before me.
3. The main issue involved in this case is shortage of finished goods and inputs which was detected by the team of Preventive Officers on their visit.
4. The Central Excise duty on such shortage was also paid by the appellant without any protest on being pointed out by the Preventive Officers.
5. Ms. Padmavati Patil, learned Advocate appearing for the appellants submits that Shri. Tilakraj Gupta has died after filing this appeal therefore, the penalty against Shri. Tilakraj Gupta is not maintainable in these circumstances. She has also filed the death certificate confirming the date of death i.e. 28.04.2008. To support her contention she filed the citation of Jiwraj Srinivas Rathi 2008 (228) ELT 415 (Tri-Mum.) wherein it was held that Appeal Abatement of appeal Death of party It abates the appeal against that party on production of death certificate. She further relied on the judgement of the Honble High Court of Calcutta in the case of Tarak Nath Gayen and Others vs. CEGAT 1987 (31) ELT 631 (Bom.) wherein it was held that the penalty amount not recoverable from the legal representatives of accused, imposition of penalty is intended to penalize the accused, therefore recovery of penalty from the legal representatives would amount to punishing the legal representatives hence penalty cannot be recovered from the legal representative. On the issue of clandestine removal, she submits that the appellants are the manufacturer of different sizes of ingots which differs in weight and shortage was determined by the department based on surmises and just eye estimation. The actual weighment by the department and physical verification were not prepared. She further submits that the allegation of the department is not supported by any strong and positive evidence like excess consumption of electricity, statement of suppliers etc. She, further, submits that credit of Rs.24,442/- was taken by the appellants which was based on xerox copy of invoice certified by Range Supdt is admissible and to support her contention she placed reliance on the following judgements:-
a) Klockner Supreme 2002 (140) ELT 370 (M.P.)
b) Dhaulagiri Polyolefins 2002 (147) ELT 843 (T)
c) Kothari General Foods 2002 (144) ELT 338 (T)
d) Hindustan Lever Ltd. 2002 (51) RLT 724 (T)
e) Ultramarine & Pigments 1996 (64) ECR 616 (T)
f) Hero Cycles Ltd 2002 (149) ELT 648 (T)
g) National Fertilizers td. 2002 (48) RLT 160 (T)
6. She further submits that the penalty under Section 11AC is not imposable on the appellants as they have not suppressed any fact from the department and the department has failed to prove the clandestine removal of the goods with supporting evidence. She further submits that if in any case the penalty under Section 11AC is to be confirmed then it is to be reduced to 25% of the duty demand as the appellants have already paid the duty demand before the issuance of the show cause notice. To support this contention she placed reliance on Balaji Exports 2009 (237) ELT 505 (Tri. Ahm.).
7. On the other hand Shri. P.K. Agarwal, learned SDR submits that the appellants plea that actual weighment was not made and that shortage of goods was based on assumptions, the appellants never questioned the correctness of panchnama nor requested for re-checking / re-verification till the show cause notice was issued. The appellants failed to bring on record a copy of panchanama and the shortage was admitted by the appellants. To support this contention he placed reliance on Systems and Components Pvt. Ltd. 2004 (165) ELT 136 (SC) wherein it was held that admitted facts need not be proved. He further submits that in the case of clandestine removal, documentary evidence cannot be physically available because of the clearance by the appellants in the clandestine / secret manner. In case of clandestine removal, department will not produce direct evidence and such evidence can be gathered from the circumstances which was rightly held in the case of Siemens Ltd. vs. CCE, Calcutta 1994 (70) ELT 305. He further submits that Revenue is not required to prove their case with mathematical precision as it was rightly held in the case of Columbia Electronics Ltd. vs. CCE, Indore 2002 (143) ELT 635 (Tri. Del). He placed reliance on D. Bhoormull 1983 (13) ELT 1546 wherein it was held that department is not required to prove its case with mathematical precision to a demonstrable degree. Further it was held that it is exceedingly difficult for the prosecution to prove facts which are especially within the knowledge of the opponent or the accused as secrecy and stealth being its covering guards. He further relied on Greaves Cotton Ltd. 2008 (225) ELT 198 wherein in the similar circumstances the duty demand on shortage of input was upheld. He further submits that the penalty under Section 11AC of the Central Excise has rightly imposed on the clandestine removal of the goods which amounts to suppression of facts. To support this contention he placed reliance on Rajasthan Spinning Mills 2009 (238) ELT 3 (S.C.). With regard to Cenvat Credit on the strength of Xerox copy of the invoice he submits that the correct and proper documents for the Cenvat Credit was not available and it amounts to contravention of Cenvat Credit Rules and the adjudicating authority has rightly denied the credit. To support this contention he placed reliance on the following judgements:-
a) Spectra Electronics Pvt. Ltd. 2009 (235) ELT 795 (HP)
b) Karamchand Appliances Pvt Ltd. 2009 (238) ELT 706 (HP)
c) S.K. Foils Ltd. - 2009 (239) ELT 395 (P&H)
8. He further submits that the penalty on the Director of the Company was rightly imposed and to support this contention he relied on I.P.I Steel vs. CCE 2003 (151) ELT 97 and prayed that the duty demand, interest and penalty were rightly imposed on the appellants and the impugned order be upheld.
9. Heard both sides and perused the records.
10. On careful examination of the submissions made by both the parties, I find that Shri. Tilakraj Gupta, Director of the appellant M/s. Shivkripa Ispat Pvt. Ltd. has already expired and in view of the reliance placed by the learned Advocate in the case of Tarak Nath Gayen and Others (cited supra) the penalty liability on the legal representative cannot be fastened. The learned SDR has not argued on this point. I allow the appeal of Shri. Tilakraj Gupta with this observation.
11. On the issue of clandestine removal, I find that there was no protest by the appellants that the stock taking was done on eye estimation and no actual weighment was done and the protest against the same was nowhere made by the appellants before issuing the show cause notice and the same was admitted by the appellants and accordingly, they paid the duty without any protest. I do not find any force in the arguments of the learned Advocate for the appellant, so, I confirm the duty demand of such clandestine removal.
12. On the issue of credit taken by the appellants on the basis of Xerox copy of the invoice, I have gone through the order passed by the Honble High Court of Madhya Pradesh in the case of Union of India vs. Kataria Wires Ltd. 2009 (241) ELT 31 (M.P) wherein it was held that merely because of original and duplicate copy lost, claim not to be defeated especially when certified copy, issued by Superintendent. Accordingly, I allow the Cenvat Credit taken by the appellant on the strength of Xerox copy of invoice certified by the Range Superintendent.
13. On account of penalty under Section 11AC, I find that when the issue of clandestine removal is decided against the appellant, equivalent amount of penalty is imposable against the appellants and the penalty under Section 11AC has been rightly imposed on the appellant. From the records it reveals that although the appellants have paid the duty demand but failed to pay the interest on applicable rates within prescribed time limit, the benefit of the proviso of Section 11AC is not available to the appellants and the penalty liable of equivalent amount of duty is confirmed.
14. With these observations, the appeals are disposed of.
(Pronounced in Court on 15.10.09) (Ashok Jindal) Member (Judicial) nsk 7