Kartar Steels (Pvt.) Ltd. Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:
1. the appellant filed this appeal against the order-in-appeal no.322/c.e./chd/95, dated 31-10-1995 passed by the commissioner (appeals), central excise, chandigarh.2. the brief facts of the case are that appellants are engaged in the manufacture of steel ingots falling tinder sub-heading no. 7206.90 of the schedule of central excise tariff act, 1985. on 15-11-1993 the special pbc staff visited business premises of the appellant and on physical verification of stock of finished goods and inputs, found 17.250 mt of steel ingots valued at rs. 1,46,625/- involving the duty of rs. 17,250/- in excess of stock of finished goods recorded in rg 1 register and also found shortage of 12 mts of ferro silicon. the appellants reversed the credit of 9000/- in rg a23 part ii on 15-11-1993 regarding shortage of 12 mts of perron silicon: after adjudication the assistant commissioner, central excise ordered confiscation of the excess steel ingots weighing 17.250 mts vinder rule 173q of central excise rules, 1944 and imposed redemption fine of rs. 30,000/-. the personal penalty of rs. 10,000/- was also imposed under rule 173q and 226 of the central excise rules, 1944. ld. counsel appearing on behalf of the appellants argued that the rg i register was written upto 11-11-1983 and on 12-11-1983 the clerk dealing the excise work was on leave. he further submitted that 13-11-1983 and 14-11-1983 were gazetted holidays on account of diwali and vishkarma day on which factory was also closed. it was only on 15-11-1983 i.e. the next working day when the central excise officer visited the factory and found the said quantity in excess. ld. counsel further submitted that there is no evidence against the appellant that they have removed the finished goods without payment of duty or even preparation having been made for such removal. ld. counsel relied upon the decision of the tribunal in garden silk mills v. cce reported in 1991 (51) e.l.t. 373 and the decision in the case of balls and cylpebs ltd. v. cce allahabad order no., a-1511/96-nb, dated 5-6-1996.3. shri nanak chand appearing on behalf of the respondent reiterated the finding of the lower authority.4. heard both sides. in the present case on the physical verification of the stocks of finished goods 17.250 mts of steel ingots were found in excess of the stock of finished goods recorded in rg 1 register. the appellant's explanation to the visiting officers was that the excise clerk was on leave on 12-11-1983 and that 13-11-1983, and 14-11-1983 were gazetted holidays being diwali and vishkarma days and the factory was also closed and no clearances was made in these days. the order of adjudicating authority and the order-in-appeal did not show anything that the finished goods were not entered in the rg 1 register with intention to remove the same without payment of duty or even there was preparation on the part of the appellant having been made for such removal. the tribunal in the case of garden silk mills (supra) held that in absence of any clandestine removal as the goods were still in the factory premises and no attempt for removal had been made the order of confiscation and granting the redemption on payment of fine is not sustainable. the tribunal followed the ratio of above mentioned decision in the case of balls and cylpebs v. cce (supra). in the present case also there is no evidence on record to show that the appellants have removed the goods without payment of duty or there is any preparation having been made for such removal. in these circumstances, the confiscation of seized goods and granting an option to redeem on payment of fine of rs. 30,000/- is not sustainable in the light of the tribunal's order referred to above. applying the ratio thereof the order of confiscation and granting the option to redeem on payment of fine is set aside. however, in the circumstances of the case, the personal penalty is reduced to rs. 2,000/- for non maintenance of statutory records under rule 226 of the central excise rules. the appeal is disposed of as indicated above.

Judgment:
1. The appellant filed this appeal against the Order-in-Appeal No.322/C.E./CHD/95, dated 31-10-1995 passed by the Commissioner (Appeals), Central Excise, Chandigarh.

2. The brief facts of the case are that appellants are engaged in the manufacture of steel ingots falling tinder sub-heading No. 7206.90 of the Schedule of Central Excise Tariff Act, 1985. On 15-11-1993 the special PBC staff visited business premises of the appellant and on physical verification of stock of finished goods and inputs, found 17.250 MT of steel ingots valued at Rs. 1,46,625/- involving the duty of Rs. 17,250/- in excess of stock of finished goods recorded in RG 1 register and also found shortage of 12 MTS of ferro silicon. The appellants reversed the credit of 9000/- in RG A23 Part II on 15-11-1993 regarding shortage of 12 MTS of Perron silicon: After adjudication the Assistant Commissioner, Central Excise ordered confiscation of the excess steel ingots weighing 17.250 MTS vinder Rule 173Q of Central Excise Rules, 1944 and imposed redemption fine of Rs. 30,000/-. The personal penalty of Rs. 10,000/- was also imposed under Rule 173Q and 226 of the Central Excise Rules, 1944. Ld. Counsel appearing on behalf of the appellants argued that the RG I register was written upto 11-11-1983 and on 12-11-1983 the clerk dealing the excise work was on leave. He further submitted that 13-11-1983 and 14-11-1983 were gazetted holidays on account of Diwali and Vishkarma day on which factory was also closed. It was only on 15-11-1983 i.e. the next working day when the Central Excise officer visited the factory and found the said quantity in excess. Ld. Counsel further submitted that there is no evidence against the appellant that they have removed the finished goods without payment of duty or even preparation having been made for such removal. Ld. counsel relied upon the decision of the Tribunal in Garden Silk Mills v. CCE reported in 1991 (51) E.L.T. 373 and the decision in the case of Balls and Cylpebs Ltd. v. CCE Allahabad order No., A-1511/96-NB, dated 5-6-1996.

3. Shri Nanak Chand appearing on behalf of the respondent reiterated the finding of the lower authority.

4. Heard both sides. In the present case on the physical verification of the stocks of finished goods 17.250 MTS of steel ingots were found in excess of the stock of finished goods recorded in RG 1 register. The appellant's explanation to the visiting officers was that the Excise clerk was on leave on 12-11-1983 and that 13-11-1983, and 14-11-1983 were gazetted holidays being Diwali and Vishkarma days and the factory was also closed and no clearances was made in these days. The order of adjudicating authority and the order-in-appeal did not show anything that the finished goods were not entered in the RG 1 register with intention to remove the same without payment of duty or even there was preparation on the part of the appellant having been made for such removal. The Tribunal in the case of Garden Silk Mills (supra) held that in absence of any clandestine removal as the goods were still in the factory premises and no attempt for removal had been made the order of confiscation and granting the redemption on payment of fine is not sustainable. The Tribunal followed the ratio of above mentioned decision in the case of Balls and Cylpebs v. CCE (supra). In the present case also there is no evidence on record to show that the appellants have removed the goods without payment of duty or there is any preparation having been made for such removal. In these circumstances, the confiscation of seized goods and granting an option to redeem on payment of fine of Rs. 30,000/- is not sustainable in the light of the Tribunal's order referred to above. Applying the ratio thereof the order of confiscation and granting the option to redeem on payment of fine is set aside. However, in the circumstances of the case, the personal penalty is reduced to Rs. 2,000/- for non maintenance of statutory records under Rule 226 of the Central Excise Rules. The appeal is disposed of as indicated above.