MINDA INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) Briefly stated, the facts of the case are as under: Officer of Central Excise visited the appellant's factory on 25.3.98 and conducted verification of the physical stock of inputs and final products, whereupon, inter alia, a shortage of certain auto parts (final products) was found vis -a -vis the RG -1 balance. A panchnama was duly prepared in this connection in the presence of Shri J.S. Sisodia, Manager (Finance) of the appellant company, and other independent witnesses. A statement of Shri Sisodia was also recorded under Section 14 of the Central Excise Act, wherein he admitted the shortage and paid the Central Excise Duty on the goods found short. On the basis of these results, the department issued a show -cause notice proposing to appropriate the amount of duty so paid by the party, towards demand of duty on the goods found short, as also proposing to impose penalty on them under Section 11AC of the Act on the alleged grounds of fraud, suppression and contravention of various rules of the erstwhile Central Excise Rules, 1944. These proposals were contested by the party in their reply to the show -cause notice. The adjudicating authority confirmed the demand of duty (Rs. 99,424) and appropriated the amount deposited by them, towards the demand so confirmed. It also imposed a penalty of equal amount on the party under Section 11 AC. The appeal preferred against the order of the original authority, by the appellants, did not succeed before the Commissioner . (Appeals).

(2.) Heard both the sides.

(3.) The appellants' representative submits that they are a Public Ltd. Company and had not intention whatsoever of evading duty on any goods on the date of visit of Central Excise officers to their factory. 4968 pcs of head lamps (Part No. HL 5159), being a part of the products found short on 25.3.98, had been loaded onto a truck within the factory premises, before the officers' visit. But the truck was still within the premises when the panchnama was recorded. Therefore, it is wrong to say that the above quantity of goods had been cleared clandestinely. Regarding the remaining quantity of the goods found short, the representative of the company submits that these goods were very much lying in the production floor of the factory and had not been taken into the bonded storeroom, for which reason, there cannot be a valid case of clandestine removal in respect of this quantity of the goods. It is further submitted that there is no case for imposing any penalty under Section 11AC inasmuch as the appellants did not contravene any provision of law with intent to evade payment of duty.