M/S. Sarvottam Rolling Mills Pvt.Ltd vs C.C.E. Meerut

[Arising out of Order-in-Appeal No. 142-CE/MRT-I/2012 dated 18.06.2012 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Meerut-I].

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. Sarvottam Rolling Mills Pvt.Ltd .Appellants

Vs.

C.C.E. Meerut .Respondent

Appearance:

Shri Alok Arora, Advocate for the Appellants

Shri R.K. Mishra, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 06.02.2015

FINAL ORDER NO. 50373/2015-EX(SM)

Per Ashok Jindal:

The appellant is in appeal against the impugned order demanding duty, interest and penalty.

2. The facts of the case are that the appellant is engaged in manufacturing of MS Bar. On 29.07.2009 the physical verification of stock was conducted and it was found that there is a shortage of finished goods that is 102.230 Metric Tonnes of MS bars. They recorded the statement of their accountant who could not give any valid explanation with regard to shortage. Proceedings were initiated and panchnama was drawn. It was also found that the appellant has availed Cenvat Credit on building material that is Joist Angle which was used in fabrication of building material. Therefore, the same was sought to be denied. The appellant immediately reversed the Cenvat Credit and paid the duty on finished goods but the proceedings were initiated against the appellant for demanding the duty along with interest and penalty. Both the lower authorities confirmed the demand.

3. The Ld. Counsel for the appellants submits that in this case the factory of the appellant was visited on the said date on 29.07.2009 at 11.05 hrs and panchnama was drawn. They left the premises at 11.30 hrs. In 25 mins the whole of the stock cannot be verified as, as per the books of account the stock was 1992.260 and physically verified from 1890.03 the stock was taken on estimation assumption and same is not admissible as held by this Tribunal in the case of C.C.E. Meerut Vs. Shri Balaji Ispat Pvt. Ltd. -2014 (310) E.L.T. (Tri-Del). Therefore, it is prayed there was no shortage of finished goods. Accordingly duty is not demandable. It is further submitted that during the course of taking the stock the production on that day was not considered. If same is considered, the shortage would come down to 46 Metric Tonnes and same is less than 2-3% of the total stock found. On that ground also demand is not sustainable. With regard to the Cenvat Credit wrongly availed by them on Joist Angles, he submits that on pointing the appellant has immediately reversed the credit and not contested the issue therefore penalty be dropped.

4. On the other hand Ld. AR reiterated the findings of the impugned order and submits that the stock was taken in the presence of the appellant and same has not been disputed at that time. In this circumstances demand is sustainable.

5. Heard the parties. Considered the submissions.

6. It is an admitted fact that in this case factory was visited on 29.07.2009 at 11.05 hrs and panchnama was drawn. It is also a fact on record that proceedings were concluded at 11.30 hrs on 29.07.2009. That is whole of the proceedings were completed within a span of 25 minutes i.e. drawing of the panchnama and physical verification of stock of almost 2000 Metric tonnes which is not possible by all the means. Therefore, stock taking is not proper and shortage found are only on the estimate basis which is not acceptable. In these circumstances, shortage found at the time of physical verification on 29.07.2009 is not sustainable. Accordingly, demand on this account is set aside. Consequently, interest and penalty is not imposable.

7. Further I find that for the inadmissible Cenvat Credit on Joist Angle the appellant has already reversed the Cenvat Credit and not disputed the same. Therefore, demand on that account has been confirmed along with interest. As the appellant has immediately reversed on pointing out by the revenue at the time of investigation I hold that penalty is not imposable. Consequently penalty is dropped. With these terms appeal is partly allowed.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

4

E/3227/2012-EX(SM)