GARG TUBES LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE assessee as well as Revenue are in appeal against the impugned order. The facts of the case are that during the course of investigation in the factory premises of the assessee shortage of raw material and finished goods was found and the assessee admitted the same and paid the duty voluntarily. Thereafter, the show cause notice was issued for appropriation of duty paid and proposal of penalty under Rule 25 read with Section 11AC of the Act. The adjudicating authority confirmed the demand and imposed equivalent amount of penalty under Rule 25 read with Section 11AC of the Act. On appeal, the Commissioner (Appeals) reduced the penalty observing that there is no collaborative evidence of clandestine removal and the ingredient of Section 11AC are not fulfilled, the penalty under Section 11AC was not imposable but reduced the penalty under Rule 25 of the Central Excise Rules, 2002 to Rs. 2,43,086/ - from Rs. 9,72,343/ -.

(2.) REVENUE is in appeal against the reduction of penalty and assessee is in appeal against the confirmation of penalty. The learned Advocate appearing on behalf of the assessee submitted that during the course of investigation, they have explained the reasons for shortages of inputs as well as of finished goods. In the reason they have stated that they are recording their productions of raw material on the basis of standard formula obtained by them and for over a period of time there may be evaporation which may cause shortage of raw material as well as of finished goods and there is no collaborative evidence against the assessee that they have any intention to clear the inputs or finished goods clandestinely without paying the Central Excise duty. He also submitted that in their own case for the earlier period, this Tribunal, vide order No. 970/2008 SM dated 13.3.08 on similar facts, has dropped the penalty under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of the Act.

(3.) HEARD both sides.