Krishna Saa Fabs Pvt. Ltd vs Cce, Tirupathi

[Arising out of Order-in-Appeal No. 27/2007(T)CE dt. 12/09/2007 passed by Commissioner of Central Excise and Customs(Appeals), Guntur ]

For approval and signature:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 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

Krishna Saa Fabs Pvt. Ltd. Gajulamandyam, Chittoor Dt. Andhra Pradesh Appellant(s)

Versus

CCE, Tirupathi Respondent(s)

Appearance:

None For the Appellant

Shri N Jagdish, Superintendent(AR) For the Respondent

Date of Hearing: 29/05/2015

Date of Decision: ..

CORAM:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER

Final Order No. / 2015

Per : ARCHANA WADHWA

The appellants have filed written submissions to dispose of the appeal on merits. Accordingly I have heard the learned AR and have gone through the impugned order.

2. It is seen that the appellant is engaged in the manufacture of MS towers and MS structures falling under Chapter 73 of the Central Excise Tariff Act. Their factory was visited by the Central Excise officers, who conducted various checks and verifications and as a result some shortages in the stock of the final product, to the extent of around 8.256 MTs were detected.

3. Further investigations were also taken up at the appellants buyers end i.e. M/s. U.R. Telecom Research Ltd., Bangalore, who deposed that they have received 20.315 MTs of MS towers from the appellant under the cover of invoice Nos. 8 to 15 without payment of duty. Such invoices were issued during the period 11/08/1998 to 13/08/1998.

4. Thereafter proceedings were initiated against the appellant by way of issuance of show-cause notice dt. 02/03/1999 proposing to confirm duty of Rs.2,26,756/- along with confirmation of demand of interest and imposition of penalties etc. The said show-cause notice culminated into an order passed by the original adjudicating authority confirming the demand and imposing penalties upon various parties. The same were appealed against before Commissioner(Appeals) who confirmed the duty to the extent of Rs.1,59,269/- along with interest and penalty but set aside the penalties imposed upon other assessees. The said order of the Commissioner(Appeals) was appealed against before Tribunal who set aside the same and remanded the matter to the original adjudicating authority for de novo consideration.

5. The present impugned order stands passed by the authorities below in de novo proceedings. On going through the same, I find that duty to the extent of Rs.1,59,269/- stands confirmed in respet of 20.315/- MTs of MS towers, allegedly removed clandestinely by the appellant and towards shortage of 8.256 MTs found in the stock of the final product. In addition interests stand confirmed and penalty of identical amounts stand imposed upon the assessee.

6. The confirmation of demand of duty in respect of 20.315 MTs of MS towers is primarily based upon the disclosure of facts by M/s. U.R. Telecom Research Ltd. accepting the receipt of the said quantity of the goods under the cover of invoice Nos.8 to 15. Payment for consideration of the said quantity of towers was made by an account payee cheque. The fact that the said supplies were made by the appellant does not stand disputed by them. However it is their contention that they had also issued invoices No.1 to 4 for supply of the goods to M/s. Binfo Electronics Pvt. Ltd., another unit located at Bangalore, on payment of duty. There was some mix ups between the said invoices Sl.No.1 to 4 and their invoices No.8 to 15, and the names of consignees got mixed up. As such, it is their contention that inasmuch as the goods supplied under the cover of invoice No.1 to4 relating to the quantity of 6.580 MTs were duty paid, the same should be deducted from the total quantity of 20.135 MTs. and the duty, if any, should be confirmed only in respect of the balance 13.555 MTs.

7. Lower authorities have not accepted the above stand of the appellant by observing that admittedly the goods were cleared to M/s. U.R. Telecom Research Ltd., under the cover of invoice Nos.8 to 15 and there is no duty payment in respect of the same. As such, the benefit of the clearances effected under invoice Nos.1 to 4 cannot be extended to them.

8. I find that the fact of clearance of 20.315 MTs of MS towers to M/s. U.R. Telecom Research Pvt. Ltd. does not stand disputed by the appellant. The said clearances were made under the cover of invoice Nos. 8 to 15. No duty payment particulars stand given by the appellant in respect of the said clearances. To claim the benefit of Central Excise duty paid in respect of invoice nos.1 to 4, in support of their contention that a part of the goods were cleared on payment of duty cannot be appreciated and accepted inasmuch as the appellant had not produced any evidence in respect of clearance of 20.315 MTs of towers to M/s. U.R. Telecom (P) Ltd. As such, I am of the view that the duty demand in respect of the said quantum of supplies made by the appellant is required to be upheld. However I am of the view that the entire consideration has to be treated as cum duty and the benefit of duty has to be extended to the appellant. Accordingly I direct the lower authorities to recalculate the duty demand in respect of 20.315 MTs of MS towers supplied to M/s. U.R. Telecom Research Pvt. Ltd., after treating the entire consideration as cum-duty and after extending the benefit of duty to the appellant. The penalty required to be imposed upon the appellant would also to be equal to the demand of duty requantified.

9. As regards confirmation of demand of duty in respect of 8.256 MTs, detected as short stock by the visiting officers, I find that the said visit in the factory was on 09/09/1998. The invoices No.8 to 15 under the cover of which the appellant cleared the goods to M/s. U.R. Telecom Research Pvt. Ltd. are dated 11/08/1998, 12/08/1998 and 13/08/1998. This clearance was during the period of less than one month prior to the visit of the officers. As such, it can be reasonably concluded that such non-duty paid clearances from the factory, contributed to the shortages of the final stock of the appellant. Otherwise also in the absence of any corroborative material showing clearance of such short found final goods to any other person, I am of the view that the confirmation of demand of duty in respect of the same on the findings of clandestine removal is not in accordance with the settled judicial precedent decisions. Accordingly, I set aside the confirmation of demand in respect of such quantum of goods found short during the day of the visit of the officers, by extending the benefit of doubt to the appellant, along with setting aside of penalty in respect of the same.

10. Appeal is disposed of in above terms.

(Order pronounced on)

ARCHANA WADHWA JUDICIAL MEMBER

Raja.

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