HEM INDUSTRIES Vs. COMMISSIONER OF C. EX., DAMAN

JUDGEMENT

(1.) DURING the visit of the officers to the appellants premises on 24 -1 -08 by the central excise officers it was found that a large quantity of raw materials sent by the appellants to their job workers had not been received back within the stipulated period of 180 days and appellants had not reversed the credit taken on such inputs. As soon as the omission was pointed out, Shri Ajay Patel, Authorised Signatory admitted the lapse and reversed the cenvat credit, Subsequently interest was also paid. Thereafter proceedings were initiated and penalty has been imposed on the first appellant equal to the cenvat credit wrongly taken and the penalty of Rs. 10,000/ - has been imposed on the second appellant Shri Ajay Patel, the authorized signatory of the assessee.

(2.) HEARD both the sides. The learned consultant submitted that the findings of the central excise officers during the visit was not actually correct on facts but in reality such inputs had been received back but no entry was made in the concerned registers. Even then since the appellants could not explain and reconcile the facts immediately, the duty liability was discharged and interest was also paid. Subsequently the appellants undertook the exercise of verification of the records and he drew my attention to the reply given to the Commissioner (Appeals) wherein they have enclosed a full statement of the dispatches made by them and details of quantities received back. Therefore it is his submission that it was only a procedural omission and there was absolutely no intention to evade payment of duty. He also submitted that the provisions of Section 11A(2B) would be applicable in this case since the department has not been able to establish that there was an intention to evade payment of duty. Learned DR reiterates the rationale adopted by the lower authorities.

(3.) I have considered the submissions made by the learned consultant on behalf of the appellants. In this case, when the inputs have sent out to job workers, only if the infants are not received back, appellants are required to reverse the credit within 180 days. However if the inputs are received back subsequently they can take credit. In any case as submitted by the learned consultant, the obligation to account for the inputs on which credit has been taken always remains with the manufacturer. Further, the register which is required to be maintained for dispatch of goods sent to job workers has also been maintained. There was only clerical omission in making entries regularly as proved by the statements submitted by them before the Commissioner (Appeals). He submits that penalty has been sustained on the ground that the reconciliation statement was statement only before Commissioner (Appeals) and further in one example taken up by Commissioner, it was found that the date of the dispatch of the goods by the job worker on 26 -6 -07 and the date of receipt by the manufacturer happens to be same and this could not be so since the job worker was located in Chandigarh. He submits that the appellants had submitted the L.R. copy and had also submitted this omissions was also a clerical one since the concerned clerk while making the entry instead of entering the receipts had made the date of chalet as the date of receipt. It was also submitted that on the basis of one such entry, the penalty equal to duty under Section 11AC read with Rule 15(2) cannot be sustained. The intention to evade duty cannot be confirmed in cases like this where the assessee would not gain any benefit by suppression of facts or not making entry.