Decided on January 09,2015

Ashirwad Steels And Alloys Pvt. Ltd. Appellant
Cce And St Respondents


Manmohan Singh, J. - (1.)THE appellants have come in appeal against the Order -in -Appeal No. 96 -CE/MRT -I/2012 dt. 17.4.2012 passed by the Commissioner(Appeals), Meerut -I where in the Commissioner (Appeals) partly allowed the appeal by reducing penalty from Rs. 1,18,956/ - to Rs. 60,000/ - and from Rs. 16,698/ - to Rs. 5,000/ - only. The Commissioner (Appeals) has held that there was no tangible evidence of clandestine removal of goods and accordingly the provisions of section 11AC were not applicable in the case of the appellants. Despite substantial benefit granted by the Commissioner (Appeals), they are in appeal before the Tribunal with the request to set aside confirmation of demand of duty/credit and dropping of imposition of penalties.
(2.)THE brief facts of the case are that the appellants are engaged in the manufacture of M.S. Ingots, Bars falling under Chapter 72 of the First Schedule to the Central Excise Tariff Act, 1985. The main raw material for the manufacture of M.S. Bars was M.S. Ingots. The officers of the Central Preventive Customs & Central Excise, Meerut -I, on 20.07.2009, during the course of physical/verification of the stocks of the finished goods as well as raw material, lying in the factory premises of the appellants, detected a shortage of 58,900 MT of M.S. Bars, valued at Rs. 14,43,639/ - involving Central Excise duty of Rs. 1,18,956/ - and 9.650 MT of M.S. Ingots, valued at Rs. 2,01,181/ - involving Central Excise duty of Rs. 16,698/ - in comparison to the recorded balance of the said goods. Statement of Shri Israr Ahmed, Accounts Manager and Authorised Signatory of the appellants was recorded on the spot under section 14 of the Central Excise Act, 1944 and he could not put forth any plausible reason for the shortages, so detected, but agreed to the same and voluntarily debited the Central Excise duty, involved in the said shortages, vide debit entries Nos. 204 and 205 both dated 20.07.2009 in the Cenvat Account Register.
Central Excise duty amounting to Rs. 1,18,956/ - was leviable on the quantity of the finished goods found short. Credit amounting to Rs. 16,698/ -availed on inputs found short were demanded and since that is already debited by the appellant the same were appropriated along with imposition off penalty by the adjudicating authority which was later on modified by the Commissioner (Appeals).

(3.)SHRI Alok Arora appeared on behalf of the appellant. He contended that the Commissioner (Appeals) in his order has held that there were no tangible evidence of clandestine removal of goods. He has restricted to impose penalty under section 11AC of Central Excise Act. He contended that the weight has been taken on average basis and percentage comes to 2.55% in the M.S. Ingots and in the bars 8.5% against the book balance 378.445 MT. Shortage of ingots was 9.65 MT. He also contended that in case of loose TMT and mixed lot of round, TMT and TMT & Tor, he claimed that it was done on eyes estimation basis. He referred to the judgment of Hon'ble Allahabad High Court in the case of Minakshi Castings -2011 (274) ELT 180 (All.) and Single Member judgement of the Tribunal in the case of CCE, Meerut -I v. Sri Jaibalaji Ispat Pvt. Ltd 2014 (310) ELT 556 (Tri. -Del.). He requested that there is no case of the department.

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