M/S. Saco Alloys Pvt. Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 474(DKV) CE/JPR-I/2010 dated 22.10.2010 passed by Commissioners of Central Excise (Appeals ) Jaipur I]

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. Saco Alloys Pvt. Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

Jaipur

Appearance:

Shri A Jaju, Advocate for the Appellants

Shri Rajeev Gupta, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 27.10.2015

ORDER NO. FO/ 53367/2015-Ex (SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order demanding duty along with interest and imposing penalty on him on account of shortages found during the course of physical verification.

2. The facts of the case are that appellant is manufacturer of MS/SS ingots and Flats. On 04.03.2008, a search was conducted in his factory and it was found that as per statutory records recorded balance of SS flats was 167.730 MT but on physical verification, it was 66.23 MT, therefore, there was a shortage of 101.50 MT, a panchnama was drawn before independent panchas and statement of authorized signatory was recorded wherein he has admitted that they have cleared the short found goods without cover of Central Excise invoices and without paying the duty. In these set of facts a show cause notice was issued to demand duty on finished goods along with penalty under section 11AC of the Act. Matter was adjudicated. As duty was paid by the appellant within a month of investigation, the same was appropriated but demand of interest was confirmed and penalty was also imposed. Aggrieved from the said order, appellant is before me.

3. Learned Counsel for the appellant submits that the appellant is not contesting duty liability but contesting the imposition of interest and penalty imposed on them. He submits that on oral statement of authorized signatory on shortages found during the course of investigation, penalty cannot be imposed as held by this Tribunal in the case of [Sri Jaibalaji Ispat Pvt. Ltd. 2014 (310) ELT 556 (Tri-Delhi)] and Ambica Polytubes [2013 (290) ELT 317 (Tri-Delhi)]. Therefore, he prays that penalty imposed on the appellant be set aside. He also submits that as they have paid duty within a month of investigation, therefore, no interest is payable by them.

4. On the other hand, learned AR opposed the contention of the learned Counsel and submits that in this case, investigation was done, stock taking was carried out wherein shortages were found and it has been admitted by the appellant that they have cleared the goods clandestinely. Therefore, penalty is rightly imposed by the adjudicating authority.

5. Heard the parties. Considered the submissions.

6. As the learned Counsel for the appellant has conceded the liability of duty, therefore duty demand is confirmed. With regard to the interest, I find that appellant has paid the duty within a month of investigation, no interest is payable by the appellant.

7. Now I come to the imposition of penalty on the appellant. I have gone through the panchnama and submissions recorded by the authorities below at the time of investigation by authorized signatories who admitted that they have cleared the short found goods without payment of duty clandestinely. In these circumstances, the allegation of suppressions under section 11AC of the Central Excise Act, 1944 stand proved. The case law relied by the learned Counsel are not applicable to the facts of this case as in the case of Ambica Polytubes (supra) there is a clear cut finding of the learned Commissioner (Appeals) that the shortages of final product admitted and duty paid does not establish clandestinely removal in the absence of corroborative evidence, whereas in this case authorized signatory admitted the shortages as clandestine removal. In the case of Sri Jaibalaji Ispat Pvt. Ltd. (supra), there was shortage of inputs and not of final goods. Therefore, these case laws have no relevance to the facts of this case as charges of clandestine removal stand proved. Thus, in this case, the penalty under section 11 AC of the Act is imposable on the appellant . Further I find that as per the proviso to section 11 AC of the Act, penalty is to be paid 25% if the assessee pays the duty along with interest within 30 days of the adjudication. Admittedly, in this case, the appellant has paid the duty before adjudication and moreover within the same month of investigation and no interest was payable by the appellant. In these circumstances, as per the proviso of Section 11AC of the Act, penalty is reduced to 25% of duty in question. Therefore, appellant is directed to pay 25% of duty as penalty within 30 days of communication of this order failing which the appellant shal be liable to pay duty 100% as penalty.

8. With these terms, appeal is disposed of.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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