M/S. Dasna Steels Pvt. Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 192/CE/MRT-I/2012 dated 17.7.2012 passed by Commissioner of Central Excise (Appeals), Meerut]

For approval and signature:

Honble Mr 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. Dasna Steels Pvt. Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

& ST, Meerut

Appearance:

None for the Appellants

Shri B B Sharma, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 23. 6.2015

ORDER NO. FO/ 52039 /2015 SM

Per Ashok Jindal :

The appellants is in appeal against the impugned order confirming demand along with interest and imposition of penalty of Rs.30,000/- on the appellant.

2. The facts of the case are that on 22.12.2009, at 8.20 AM, the factory of the appellant was visited by the Central Excise officers and it was found that as per the statutory records, the inputs (sponge iron) is shown as 592.855 MT whereas on verification, it was found to be 277.43MT. Therefore, there was shortage of 315.425 MT which the appellant failed to explain. Therefore a show cause notice was issued to the appellant to allege that said inputs have been cleared clandestinely by the appellant. Consequently, they are not entitled to take cenvat credit on these inputs and liable to pay duty along with interest and penalty is also proposed under section 11 AC of the Act. The show cause notice was adjudicated. Demand of duty along with interest has been confirmed. Penalty equal to the duty was imposed. On appeal before the learned Commissioner (Appeals), penalty was reduced to the tune of Rs.30,000/- by holding that the Revenue has failed to come with tangible evidence of clandestine removal of goods. Aggrieved from the said order, appellant is before me challenging the imposition of penalty.

3. Heard the parties and perused the records.

4. In the impugned order, learned Commissioner (Appeals) has observed that in the matter of alleged shortage in stock of inputs, there is no tangible evidence of clandestine removal of goods. The said finding has not been challenged by the Revenue, but the learned AR submits that he is not sure whether Revenue has challenged this finding or not. Further, I find that as per record, there is no tangible evidence produced by the Revenue to allege clandestine removal of inputs. It is also contended by the learned Counsel that in this matter stock taking was done only on eye estimation basis. As there is no other evidence produced by the Revenue for clandestine removal of the inputs, penalty under section 11AC of the Act is not imposable on the appellants. Same view has been taken by this Tribunal in the case of Swaroop Casting P Ltd. vs. CCE, Meerut [2019 (290) ELT 392 (Tri-Del)]. Further, the reliance was made by learned AR on the case of J C Rolling Mills Pvt. Ltd. vs. CCE, Kanpur [ 2012 (276) ELT 254 (Tri-Del)] to say that penalty is imposable. In that case also, this Tribunal has held that every shortage cannot be presumed to be a case of clandestine removal in absence of other evidence corroborating the same. The authorized signatory has expressed his inability to explain the shortage but no further investigation was undertaken either from dealers or other concerned parties. Under these circumstances, the question of upholding the charge of clandestine removal which is a serious charge does not arise. Further the Honble High Court of Allahabad in the case of Minakshi Castings reported in [2011 (274) ELT 180 (All)] also held that shortage of finished goods without evidence of clandestine removal, could not lead to inference of evasion of duty and no penalty is imposable.

5. In these circumstances, relying on the decision of Minakshi Castings (supra) I hold that penalty on the appellant is not imposable. Therefore, penalty imposed under the impugned order on the appellant is set aside. In these terms, appeal is disposed of.

( Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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