Sangal Papers Ltd vs C.C.E. & S.T. Meerut-I
- CitationExcise Appeal No. E/55002 & 55408/2014-E[SM]
Ratio decidendi
The rule this decision rests on
Where shortage of finished goods is detected during investigation, penalty for clandestine removal under Rule 25 of the Central Excise Rules read with Section 11AC of the Central Excise Act, 1944 cannot be sustained in the absence of positive evidence that the goods were clandestinely removed; a mere shortage, unsupported by such evidence, does not establish clandestine removal. Consequently, where no clandestine removal is established, the penalty imposed on the company's Managing Director, which rests on the same premise, is likewise not justified and cannot be sustained.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Excise Appeal No. E/55002 & 55408/2014-E[SM] [Arising out of Order-In-Appeal No. 17-CE/APPL/MRT-I/2014 dated 25.02.2014 passed by CCE (Appeals) Meerut-I]
For approval and signature: Hon'ble 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?
Sangal Papers Ltd. ...Appellant(s) Himanshu Sangal, Managing Director
Vs. C.C.E. & S.T. Meerut-I Respondent(s)
Appearance:
Mr. R. C. Gupta (Advocate) for the Appellant Mr. R K Mishra DR for the Respondent
CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial)
Date of Hearing/ Decision. 26.08.2015
Final Order No. 54244-54245 /2015_ Per S K Mohanty:
These appeals are directed against the impugned order dated 20.02.2014 passed by the Commissioner (Appeals), Customs and Central Excise Meerut, upholding imposition of penalties in the adjudication order.
2. Sh. R C Gupta, the Ld. Advocate appearing for the appellant submits that shortage in the finished goods detected by the Central Excise Officers during the course of investigation cannot be associated with clandestine clearance of the goods. Thus, according to him, in absence of any specific findings that the goods have been clandestinely removed, no penalty can be imposed under Rule 25 of the Central Excise Rules read with Section 11AC of the Central Excise Act 1944. He also submits that since the goods have not been clandestinely removed, imposition of penalty on the Managing Director is also not justified.
3. Per contra Sh. R K Mishra, the Ld. DR appearing for the Revenue reiterates the findings recorded in the impugned order.
4. I find that no evidence has been brought on record to substantiate that the shortage of goods detected during the course of investigation were clandestinely removed by the appellant. In absence of any positive evidence of clandestine removal of the goods, I am of the opinion that imposition of penalty on the Company as well as on its Managing Director is not justified. Therefore, I set aside the impugned order with regard to imposition of penalty and allow the appeals.
5. In view of the fact that the appellant is not contesting its duty liability, I am not expressing any opinion on the merits of the case and the Department is at liberty to recover the duty, if any, due from the appellants.
6. The appeals are disposed of in above terms.
(Dictated and pronounced in open court)
(S. K. Mohanty) Member(Judicial) Neha
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