Custom, Excise & Service Tax Tribunal
Shiv Durga Plast (P) Ltd vs C.C.E., Delhi Iii on 23 June, 2010
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-III SINGLE MEMBER BENCH Date of hearing/decision: 23.6.2010 Central Excise Appeals No.3064, 3065 of 2007-SM Arising out of the order in appeal No.380-381/KKG/RTK/2007 dated 29 August 2007 passed by the Commissioner (Appeals), Central Excise, Delhi III, Gurgaon. For Approval and Signature: Honble Shri M. Veeraiyan, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes 1. Shiv Durga Plast (P) Ltd. . Appellants 2. Suresh Kumar Gupta, Director Vs. C.C.E., Delhi III . Respondent
Appearance:
Shri Chinmay Agarwal, Advocate for the appellants and Shri S.K. Bhaskar, Authorised Departmental Representative (JDR) for the Revenue Coram: Honble Shri M. Veeraiyan, Technical Member Oral Order No.____________________ Per M. Veeraiyan:
These two appeals arise out of a common order in appeal No. 380-381/KKG/RTK/2007 dated 29 August 2007.
2. Shri Chinmay Agarwal, learned Advocate prays for adjournment of the hearing on the ground that his senior is out of station on urgent assignment. I find that when the matter was listed on 28.4.2010, it was specifically adjourned for 23.6.2010 at the request of the learned Advocate. On an earlier occasion on 12.1.2010 also, the matter was adjourned at the request on behalf of the Advocate. Under these circumstances, I do not find any justification for acceding to the request for adjournment.
3. Heard both sides.
4. The relevant facts, in brief, are that the factory of the appellant was visited on 3.12.2005 and on verification of the records and on physical verification of the finished goods conducted in the presence of Shri Suresh Kumar Gupta, Director and two independent witnesses it was found that there was shortage of 1,227 kgs. of PVC Hose Pipes and 16 MT of PVC resin. The value of the goods found short was Rs.7,64,025/-. Shri Suresh Kumar Gupta, Director could not explain the shortage satisfactorily and the appellant company debited the duty involved amounting to Rs.1,24,689/- on 3.12.2005. On the basis of show cause notice issued, the original authority confirmed the demand of duty which stood already paid and imposed equal amount of penalty on the appellant company and imposed penalty of Rs.10,000/- on Shri Suresh Kumar Gupta under Rule 26 of Central Excise Rules, 2002. Commissioner (Appeals) has upheld the order of the original authority.
5. Reiterating the grounds of appeal, it was submitted on behalf of the appellants that there was no evidence relied upon about clandestine removal of the goods. Mere acceptance of the shortage and payment of duty involved cannot be treated as evidencing clandestine removal.
6. Learned DR reiterates the finding and reasoning of the Commissioner (Appeals)
7. I have carefully considered the submissions from both sides. The original authority has recorded as follows:
As such there is no bit of doubt that excisable goods fond short were clandestinely removed from the factory with an intent to evade payment of Central Excise duty involved on the goods so removed. Such inference has been made merely on the ground that Shri Suresh Kumar Gupta, Director admitted the shortage and he was not in a position to explain the reason for shortage.
8. The appellants have not disputed the demand of duty on the short found goods before the original authority or before the Commissioner (Appeals). I find that a serious charge of clandestine removal has been made without any corroborative evidence. In fact, the orders of the original authority and the Commissioner (Appeals) do not indicate the book stock on the date of visit by the officers to consider the extent of shortage as to whether the same is minimal or huge. No evidence like admission statement or other private records indicating clandestine removal has been relied upon and therefore, there is no scope for invoking Section 11AC. Therefore, a penalty of equal amount under Section 11AC is not warranted. Further, I do not find any specific finding against the Director of the company about his knowledge or intention of clandestine removal, if any. However, I find that the appellant company has admittedly failed to account for the goods which have been entered in the statutory records as having been manufactured and therefore, the appellants are liable for penal action as they have violated the provisions of Rule 25 (1)(b) of Central Excise Rules, 2002.
9. Therefore, the appeals are disposed of as follows:-
a) The duty demand is upheld as not contested.
b) Penalty of Rs.1,24,689/- is modified as penalty under Rule 25 of the Central Excise Rules, 2002 and reduced to Rs.5000/- (rupees five thousand only).
c) Penalty of Rs.10,000/- on Shri Suresh Kumar Gupta, Director is set aside and his appeal is allowed, with consequential relief, as per law.
(M. Veeraiyan) Technical Member scd/ 4