KDP CASTINGS Vs. COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD

JUDGEMENT

(1.) APPELLANT is engaged in the manufacture of C.I. Castings falling under CETH 73. During the visit of factory premises of the appellant on 16 -1 -2009, 10,106 Kgs. of C.I. Castings were found in excess as compared to the stock in the daily stock register. Further, certain papers were recovered which showed production and clearance of 16,240 Kgs. of C.I. Castings to M/s. Shree Yash Industries, Ahmedabad without payment of duty. The proceedings initiated have culminated in the impugned order wherein duty has been demanded on the shortage found as well as the excess stock found in the factory; redemption fine has been imposed on the goods seized, provisionally released and confiscated; interest has been demanded and penalty under Section 11AC equal to duty involved on both excess and shortage has been imposed.

(2.) THE learned counsel on behalf of the appellant submits that he is not challenging the excess or shortage found and duty liability thereon. He submits that as regards excess quantity found in the factory, the same had not been removed from the factory but was only found to be in excess. Therefore, demand of duty in the adjudication order was not correct. The duty liability is attracted only when the goods are removed from the factory. After provisionally released, the goods were taken into daily stock account and cleared on payment of duty. Therefore duty demand in the proceedings amounts to double taxation of the same goods and as already submitted no duty could have been demanded on the excess quantity found in the factory. I find myself in agreement with these arguments. Accordingly, the duty demand of Rs. 30,861/ - on the quantity found in excess in the factory is set aside.

(3.) SINCE the duty demand on the quantity found in excess is set aside, the request of the learned counsel that for calculation of penalty under Section 11AC, duty demand on the excess quantity found in the factory should not have been taken into account is also correct. Accordingly, the penalty imposed on the appellant comes down to the extent of duty on the excess quantity found. In this case appellant had paid the 25% of the duty towards penalty along with duty demanded and interest within thirty days of the order. Since now submission of the appellant for reduction of duty demand and corresponding reduction under Section 11AC penalty has been upheld, appellant may be entitled to refund of excess penalty paid by them which will be considered in accordance with law by the proper officer.