M/S. Reema Steels Pvt. Ltd vs Cce & St, Meerut-I

[Arising out of Order-in-Appeal No.MRT-EXCUS-000-APP-113-12-13 dated 30.08.2013 passed by the Commissioner (Appeals), Meerut]

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?

__________________________________________________

M/s. Reema Steels Pvt. Ltd. Appellant

Vs.

CCE & ST, Meerut-I  Respondent

Present for the Appellant : Ms.Rinki Arora, Advocate

Present for the Respondent: Mr.R.K. Mishra, DR

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

Date of Hearing/Decision: 29.05.2015

Final ORDER NO. 53016/2015

PER: S.K. MOHANTY

Brief facts of the case are that the appellant is a manufacturer of MS ingots and avails cenvat credit of Central Excise duty paid on the inputs used in or in relation to manufacture of such final product. During the disputed period, the appellant took cenvat credit on the input i.e. sponge iron on the basis of the invoice issued by the supplier of the goods. Upon verification of the stock of inputs physically available in the factory, the Central Excise Department detected that there was shortage of 25.569 M.T. of the said input goods. Upon detection of such mistake by the department, the appellant immediately reversed the credit and intimated the reversal particulars to the Central Excise Department. Thereafter, the Department initiated proceedings against the appellant for imposition of penalty. In the adjudication order penalty was imposed under Rule 25 of the Central Excise Rules read with Section11AC of the Central Excise Act. In appeal, the Commissioner (Appeals) vide impugned order dated 30.08.2013 upheld imposition of penalty. Hence, this appeal before the Tribunal.

2. I find that the appellant nowhere in the statement recorded pursuant to summon has accepted that the shortage in the input goods has been clandestinely removed from the factory. Further, the Department has also not alleged that the inputs have been clandestinely removed from the factory. Hence, in my view, the shortage in the disputed inputs can be attributable to wrong maintenance of the books of accounts. Since, upon detection of mistake, the appellant had deposited the duty alongwith interest, in my view, the penal provisions invoked in the adjudication/ impugned order is not proper. In this context, I find support from the judgment of Allahabad High Court in the case of CCE , Kanpur vs Minakshi Castings reported in 2011 (274) ELT 180 (All.) cited by ld. Advocate for the appellant, wherein it has been held that in absence of any findings to the effect that the shortage is attributable to the clandestine removal of the goods, the penalty cannot be imposed on the appellant. In view of the above, the impugned order imposing penalty is set aside and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

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