M/S. Amrit Varsha Ispat P. Ltd vs C.C.E. & S.T. Meerut
- CitationAppeal No. E/53200/2014-EX(SM)
Ratio decidendi
The rule this decision rests on
Where the department has the shortage in its knowledge at the time of a physical verification and the assessee has admitted the duty liability and paid it immediately, no fresh show cause notice is required for appropriation of the duty already paid, and the duty paid during the investigation is to be appropriated by the Revenue. Penalty under the excise provision cannot be imposed where the shortage was detected in the department's presence during a surprise visit, the assessee admitted the liability and paid the duty at once, and the show cause notice was issued only after the expiry of the normal limitation period; in such circumstances the proceedings are in substance concluded at the point of payment, following the principle laid down in Orissa Bridge & Construction Corporation Ltd.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Original No. MRT-EXCUS-000-APP-152-13-14 dated 28.11.2013 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Meerut].
For approval and signature:
Honble Shri Ashok Jindal, 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?
M/s. Amrit Varsha Ispat P. Ltd. .Appellants
Vs.
C.C.E. & S.T. Meerut .Respondent
Appearance:
Shri Alok Arora & Ms Rinki Arora, Advocates for the Appellant
Shri G.R. Singh, DR for the Respondent
CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial)
Date of Hearing: 13.05.2015
FINAL ORDER NO. 51675/2015-EX(SM)
Per Ashok Jindal:
The appellant is in appeal against the impugned order wherein demand on duty along with interest has been confirmed on shortage of finished goods found during the course of visit.
2. The facts of the case are that on 12.08.2010 a surprise visit has been taken place at the factory premises of the appellant and MS Ingots, the finished goods were found short on which total duty liability works out to be Rs.61,857/- which was admitted by the appellant and same was paid. Thereafter, a show cause notice was issued on 06.12.2013 by invoking extended period of limitation for appropriation of duty already paid and for imposition of penalty under section 11 AC of the Act. Both the lower authorities confirmed the appropriation made in the show cause notice. Aggrieved from the said order appellant is before me.
3. The Ld. Counsel for the appellant submits that in this case an audit was conducted on 12.02.2010 and a show cause notice was issued on 06.12.2013. Therefore, show cause notice is barred by limitation as held by the Honble Apex Court in the case of Orissa Bridge and Construction Corporation Ltd. Vs. CCE Bhubaneswar-2011 (264) ELT 14 (SC). It is further submitted that in this case penalty is not imposable on the appellant as they have paid duty immediately and show cause notice has been issued after three years.
4. On the other hand, Ld. AR opposes the contention of the Ld. Counsel and submits that the method of weighment was suggested by appellant themselves and shortage has been deducted which has been admitted by the appellant and duty has been paid thereon which indicates that appellant were clearing goods clandestinely. Therefore, mandatory penalty under section 11 AC is imposable on the appellant. To support his contention he relied on the decision in the case of Bajrang Petro Chemicals (P) Ltd. Vs. CCE Kanpur-2014-TIOL-2254-HC-ALL-CX and in the case of Goyal Ispat Ltd. Vs. CCE Puducherry-2015-TIOL-749-HC-MAD-CX.
5. Heard the parties. Considered the submissions.
6. In this case it is an admitted fact that on 12.08.2010 a visit was conducted at the premises of the appellant and on the basis of formula suggested by the appellant themselves the weighment was done and stock was found short. Appellant immediately paid duty thereon. In fact, in these circumstances proceedings would have come to an end at that stage only. But revenue sought to issue show cause notice after expiry of three years for appropriation of amount paid by the appellant during the course of investigation and also proposed to impose penalty. Definitely fact of shortage was in the knowledge of the department at the time of visit itself. Therefore, show cause notice was not required to be issued to the appellant as the appellant have submitted their duty liability immediately and paid thereon. With these observations, I hold that penalty is not imposable on the appellant in the light of the decisions of the Honble Apex Court in the case of Orissa Bridge & Construction Corporation Ltd. (Supra) but duty paid by the appellant at the time of investigation is required to be appropriated by the Revenue.
7. With these terms demand on duty is confirmed. Penalty is set aside against the appellant. With these terms appeal is disposed off.
(Dictated and pronounced in the open court.)
(Ashok Jindal) Member (Judicial)
Bhanu
2
E/53200/2014-EX(SM)
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