Customs, Excise and Gold Tribunal - Delhi
Cce vs Gahoi Foods Pvt. Ltd. on 12 February, 2004
Equivalent citations: 2004(93)ECC538, 2004(168)ELT479(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. In this appeal the Revenue has questioned the validity of the impugned order of the Commissioner (Appeals) vide which he has reduced the duty and set aside the penalty.
2. The learned SDR has contended that the Director of the respondents' company, in his statement had conceded the nonaccountal of excess goods as well as shortage of the raw material and that the respondent even debited the entire duty amount before the issuance of the show cause notice, therefore, the duty amount could not be reduced by the Commissioner (Appeals) by observing that the excess goods were manufactured out of the material found short. She has also contended that the penalty could not be set aside as the duty was not deposited voluntarily but only after the shortage of the raw material and excess of the finished goods were detected by the Officers of the Department. Therefore, the impugned order deserves to be set aside.
3. On the other hand, the learned counsel has contended that there is no allegation and evidence to prove that the excess goods were manufactured out of any extra raw-material brought from outside in the factory and that it has been only presumed that the respondents might have evaded the duty if there had been no checking in the factory. He has also contended that since there was no apportionment of the penalty amount under Section 11-AC and Rule 173-Q, the entire penalty has been rightly set aside.
4. I have heard both sides and gone through the record. The bare perusal of the record shows that the Director of the respondent's company was present at the time when the physical checking of the finished goods and raw material, lying in the factory premises of the respondents, was carried out by the Officers of the Department. He admitted the excess of the finished goods and the shortage of the raw material. He accordingly even debited the duty which was leviable on the finished good which according to him were manufactured out of the material found short and cleared without payment of duty. He never at any stage retracted his statement. The Commissioner (Appeals) has reduced the duty amount by observing that the excess goods were manufactured out of the raw material found short, but such a view could not be taken by him legally when the Director of the respondents company in his statement never stated so. Therefore, the impugned order of the Commissioner (Appeals) reducing the duty amount cannot be sustained.
5. Similarly, the impugned order of the Commissioner (Appeals) regarding setting aside of the penalty on the ground that the duty was deposited before the issuance of the show cause notice and that there was no apportionment of the penalty under Section 11-AC and Rule 173-Q, also cannot be sustained legally. It is difficult to conclude that the duty was paid in this case by the respondents voluntarily, it was rather paid by them after having been caught and which fact even the Director of the respondents' company admitted in his statement. Similarly, for non-apportionment of the penalty under the two provisions of law, referred to above, could not be made basis by the Commissioner (Appeals) for setting aside the penalty in toto. Both these provisions had been invoked in the show cause notice and no prejudice can be said to have been caused to the respondents for non-apportionment of the penalty, especially when they have debited the duty themselves by accepting the lapse and evasion of duty. The penalty was rightly imposed by the adjudicating authority and the Commissioner (Appeals) has wrongly set aside the same.
6. Besides depositing the amount of duty, the respondents had already deposited 25% of the penalty in terms of the Order-in-Original of the adjudicating authority. Therefore, that deposit is sufficient to meet the requirement of law under Section 11-AC of the Act.
7. Consequently, the impugned order of the Commissioner (Appeals) is set aside and the Order-in-original is restored. The appeal of the Revenue stands allowed.