Custom, Excise & Service Tax Tribunal
Cce, Kanpur vs M/S Bajrang Petrochemicals (P) Ltd on 16 March, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III Excise Appeal No. 1136 of 2008 (SM) CCE, Kanpur Appellant Versus M/s Bajrang Petrochemicals (P) Ltd. Respondent
Excise Appeal No. 1137 of 2008 (SM) CCE, Kanpur Appellant Versus Sh. Shiv Mangal Kumar Garg, ] Auth. Signatory of ] Respondent M/s Bajrang Petrochemicals (P) Ltd. ] [Arising out of the Order-in-Appeal No. 85-86/CE/APPL/ KNP/2008 dated 28/02/2008 passed by The Commissioner (Appeals), Customs & Central Excise, Kanpur. ] For Approval and signature :
Honble Shri Rakesh Kumar, Member (Technical)
1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it would 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 of the order?
4. Whether order is to be circulated to the :
Department Authorities?
Appearance Shri I. Baig, Authorized Representative (SDR) for the Appellant None for the Respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) DATE OF HEARING : 16/03/2010.
Order No. ________________ Dated : ,,,,,,,,,,,_____________ Per. Rakesh Kumar :-
The facts giving rise to these two appeals filed by Revenue are, in brief, as under.
1.1 The Respondent company is engaged in the manufacture of Organic Composite Solvent chargeable to Central Excise Duty under heading 381400.10 of the Central Excise Tariff and Shri Shivmangal Kumar Garg is the Respondent companys authorised signatory. On 1/8/06 the Respondents factory was visited by the Jurisdictional Central Excise Officers. At that time, in presence of Shri Shiv Mangal Kumar Garg, authorized signatory, the stock taking of the finished products i.e. Organic Composite Solvent (OCS) stored in tanks was done by taking tank-wise lip-reading and the total stock found was 24519 litres as against the balance in the RG-1 register of 50300 litres. There was thus shortage of 25781 litres involving Central Excise Duty of Rs. 1,02,031/-. On being asked Shri Garg could not explain the shortage and Shri Garg while admitting the shortage could not give any explanation for the same and assured that the duty on the same would be paid. The duty on the finished goods found short was paid on 2/8/06.
1.2 Subsequently, a show cause notice dated 31/8/06 was issued to the Respondent company as well as to Shri Garg, the authorized signatory, for the duty demand of Rs. 1,02,031/- on the goods found short, imposition of penalty on the Respondent company under Section 11AC of the Central Excise Act, 1944 and on Shri Garg, authorized signatory under Rule 26 of the Central Excise Rules, 1944. The show cause notice was adjudicated by the Assistant Commissioner vide order-in-original dated 31/5/07 by which the duty demand was upheld against the Respondent company and beside this, penalty of Rs. 1,02,031/- was imposed on the Respondent company and penalty of Rs. 10,000/- was imposed on Shri S.M.K. Garg, authorized signatory. On appeal to Commissioner (Appeals), the Commissioner (Appeals) vide impugned order-in-appeal No. 85-86/CE/APPL/KNP/2008 dated 28/02/08 while upholding the duty demand set aside the penalty on the Respondent company as well as on Shri S.M.K. Garg on the ground that :
(a) Other than the mere shortage in the stock of finished goods, there is no evidence of the clandestine removal and
(b) The entire duty on the goods found short has been paid prior to the issue of show cause notice and in view of this no penalty would be imposable on the Respondent company or its authorized signatory.
1.3 It is against this order of the Commissioner (Appeals) that the Revenue has filed these appeals praying for restoration of penalty on the respondents company and its authorized signatory.
2. Though a notice for hearing had been issued to both the Respondents well in time by registered A/D, none of them have turned up for hearing. Therefore with regard to Respondents, this matter is taking up for final disposal ex-parte. Heard Shri I. Baig, the learned SDR, who pleaded that in this case there was huge shortage of finished goods for which no explanation has been given by the Respondent at the time of stock taking, that the Respondent admitting the shortage, had paid the duty, that the quantum of shortage and inability of the Respondent to give any explanation itself constitute evidence that the goods found short had been removed clandestinely without payment of duty, that in view of this, the Commissioner (Appeals) has wrongly set aside the order of penalty on the Respondents on the ground that there was no evidence of clandestine removal and that the Commissioner (Appeals)s order is not correct.
3. I have carefully considered the submissions of the learned SDR and have perused the records. There is no dispute about the fact that at the time of stock taking, shortage of 25,781 litres of OCS was detected which is a huge quantity and no explanation was given by the Respondent for the shortage and they voluntary paid the duty on the same next day. The circumstances of the case clearly indicate that the quantity found short had been clandestinely removed and hence the Commissioner (Appeals)s finding that there is no evidence that the goods found short had been clandestinely removed are not correct. Since this is a case of clandestine removal, the provisions of Section 11AC for imposition of penalty on the respondents company and of Section 26 for imposition of penalty on the authorized signatory would be attracted. In view of this, I hold that the Commissioner (Appeals)s order setting aside the penalty on the Respondent company and its authorized signatory is not correct. The same is set aside and in this regard, the Order-in-Original passed by Commissioner (Appeals) is restored. The Revenues appeals are allowed.
(Dictated and pronounced in open court) (Rakesh Kumar) Member (Technical) PK