Cce, Lucknow vs Shri Santosh Kumar Shukla Director

[Arising out of Order-in-94-97-CE/LKO/2009 dated 01.05.2009 passed by the Commissioner (Appeals), Central Excise & Service Tax, Lucknow]

For approval and signature:

HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

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 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 of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

CCE, Lucknow Appellant

Vs.

M/s.Shree Kamakhya Alloys (P) Ltd.

Shri L.C. Paliwal, Director

Shri Santosh Kumar Shukla Director  Respondents

Present for the Appellant : Shri R.K. Mishra, Advocate

Present for the Respondent: Shri Raj Kumar, Chartered Accountant

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 16.07.2015

FINAL ORDER NO. 53282-53284/2015

PER: S.K. MOHANTY

The brief facts of the case are that the respondent M/s. Shree Kamakya Alloys Pvt. Ltd. is engaged in manufacture of M.S. Ingots falling under Chapter 72 of the Central Excise Tariff Act, 1985. During the period 09.05.2006 to 04.09.2006, the factory of the respondent was closed due to certain financial constrains. The respondent had intimated closure of factory and subsequent commencement of manufacturing activity to the Central Excise Department. After two days from the date of commencement of production activity, the Jurisdictional Central Excise Authorities visited the factory of the respondent on 07.09.2006. During the course of investigation, the Central Excise officials did not find any record in the factory of the appellant. Director of the respondent company informed the officials that the books of accounts are maintained by the excise clerk, who was on leave and subsequently on 22.09.2006; desired documents were produced before the investigating team. Upon verification of the records produced on 22.09.2006, the Central Excise officers found shortage of raw-material viz. sponge iron, pig iron and iron scrap. The Department took the view that the shortage quantities of the raw-material have been used in the manufacture of the finished products removed clandestinely from the factory. In adjudication proceedings, the Central Excise duty liability was confirmed and penalty imposed on the respondent. Besides, personal penalties have also been imposed on the Directors Shri M.C. Palewar and Santosh Kumar Shukla, the respondent No.2 & 3 in the adjudication order. In appeal, the Commissioner (Appeals) has set aside the adjudication order and allowed the appeal in favour of the respondent. Hence, the present appeal before this Tribunal.

2. The ld. D.R. Shri R.K. Mishra appearing for the appellant submits that on the date of visit by the Central Excise Officials to the factory of the respondent on 7.9.2006, no documents were available for verification. He further submits that the shortage quantities of raw-material were in fact used for manufacture of finished goods removed clandestinely from the factory. It is his submission that since no records have been maintained by the respondent and the raw-material have been used for manufacture of the finished goods cleared clandestinely from the factory, confirmation of duty demand and imposition of penalty in the adjudication order is justified.

3. Per contra, the ld. Chartered Accountant, Shri Raj kumar appearing for the respondent reiterates the findings recorded in the impugned order and further submits that upon proper analysis of the facts of the case since, the Commissioner (Appeals) has set aside the order passed by the Adjudicating Authority, there are no merits in the appeal filed by Revenue.

4. Heard the ld. Counsel for both sides and perused the records.

5. I find that the ld. Commissioner (Appeals) vide the impugned order has recorded specific findings that the Department has failed to produce on record the tangible, positive, direct evidence in respect of clandestine removal of goods by the respondent. Since no tangible evidence have been produced by the Department substantiating that the goods have been removed clandestinely from the factory, I am of the opinion that the present appeal filed by the Revenue against the impugned order is not sustainable. Since the impugned order has taken all factual aspects into consideration for arriving at the conclusion that the goods have not been clandestinely removed by the respondent, I am of the view that there is no infirmity in the said order. Therefore, the appeals filed by the Revenue are dismissed.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

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2 E/2255, 2256, 2257/2007 EX. [SM