Customs, Excise and Gold Tribunal - Delhi
Shree Shyam Pipes Pvt. Ltd. And Ajay ... vs C.C.E. on 16 February, 2006
Equivalent citations: 2005(191)ELT387(TRI-DEL)
ORDER C.N.B. Nair, Member (T)
1. The appellant is a manufacturer of Copper pipes and tubes. The duty demand in the present case is under three heads. The first (about Rs. 24 lakhs) is in regard to copper scrap dispatched by the appellant without payment of duty to its job worker. The said scrap arose during the process of manufacturing of copper pipes and tubes. It was sent to the job work for melting and extruding into tubes. The job worker returned the goods to the appellant and it used the same as inputs for further manufacture. In the impugned order it is held that appellant was required to pay duty on the scrap sent to the job worker.
2. The submission of the learned Counsel for the appellant is that the procedure adopted by the appellant of duty free despatches under Rule 57F of the Central Excise Rules was correct and this position remains settled by the decision of the Larger Bench of this Tribunal in the case of Wyeth Laboratories Ltd. v. Collector of Central Excise, . The learned Counsel has also pointed out that, for subsequent period, Commissioner (Appeals) has allowed the appellant appeal in regard to the same dispute under order in appeal No. 516/CE/APPL/NOIDA/03 dated 17.11.2003 and this order has become final as no appeal had been filed against it.
3. The Second demand is upon a finding that central excise officers who visited the appellant's factory on 24.8.2001 recovered a Note Book from the appellant's premises and that entries in the said Note Book related to the clandestine despatches of goods manufactured by the appellant. Duty demand on this ground is about of Rs. 7.5 lakhs. The contention of the learned Counsel is that the entries in the register are not about clandestine removal at all and that they related to despatches and receipts of goods and that despatches mentioned in the books are reflected in duty paid clearances under invoices and other documents. The learned Counsel has taken us to the detailed explanation offered by the appellant and the findings recorded by the Commissioner on them. As against the submissions on behalf of the appellant, the learned Senior Departmental Representative submits that the despatches should be treated only as clandestine removal since as found by the Commissioner, there are discrepancies in the explanation.
4. We have carefully seen the entries, the explanation and the findings of the Commissioner. To begin with, though it is written in the front of the register "Despatch Book", the entries are of not despatches. Fourth page of the Book contains entry of about 266 pcs. totally weighing about 14 Tons. These are copper cathodes purchased by the appellant. The learned Counsel has explained that pipes manufactured by the appellant are invariably describes in terms of their diameter. In the case of entries on this page, the reference is only to numbers and weight and a reference to the appellant's purchase invoice shows that the entry is about purchase of 14 tons of copper cathode. Entry on another page (1-A), mentiones despatch to Foong Seng Hardware, Singapore. The learned Counsel has shown that this quantity was exported to Foong Seng Hardware, Singapore. The submissions of the learned Counsel are that this would clearly show that the entries are not about any clandestine activity.
5. The dispute relates to entries made on seven pages of a Register. The entries themselves are not in any detail. The dispatch to Foong Seng Hardware, Singapore alone shows the name of the party to whom the goods are sent. Thus, the register cannot be treated as telling a story of despatches. Further, as is seen from another page, the entry clearly is not about pipes in the absence of mentioned of any dimension (diameter). The particulars mentioned also would seem to suggest that the entries relate to purchase of copper cathode. The appellant also has co-related the entries in the Book to duty paid dispatches. In these circumstances, the finding that the entries in the Book relate to clandestine removal cannot be sustained.
6. The third head under which the demand is made is shortage found on stock verification. The duty demand on this account is Rs. 1.3 lakhs. The submission of the appellant is that it is because of discrepancies and not because of any clandestine activity. All of the same, the appellant has paid the duty involved.
7. It is clear from what is stated above that the duty demands in relation to despatch of Copper scrap and upon a finding that there was clandestine removal are not sustainable. These duty demands and penalties imposed are, therefore, set aside. The duty demand on account of discrepancy in stock is confirmed. However, no penalty is warranted on this account, since small discrepancy upon stock taking is normal and Central Excise Rules themselves contemplate only payment of duty on stock found short and not penalty.
8. Appeal No. E/2059/2004 of Shri Ajay Gupta, Director of Shree Shyam Pipes Pvt. Ltd. is directed against imposition of personal penalty. Since we have already set aside the penalties imposed on the assessee, there is no justification for penalty on the appellant who is a Director of The Company. Accordingly, the penalty imposed on him is set aside and the appeal is allowed.