GANGA KISAN SAHKARI CHINI MILLS Vs. CCE

JUDGEMENT

(1.) THE relevant facts of the case in brief are that the appellants are engaged in the manufacture of V.P. Sugar, Molasses classifiable under chapter heading No. 17.01 and 17.03 of the schedule to the Central Excise Tariff Act, 1885. On 12.09.1989, the Central Excise Officers visited the factory and verified the stocks and found shortage of molasses. Show cause notice dated 25.9.1989 was issued proposing demand of duty of Rs. 79,427.88. Further, a corrigendum to show cause notice dated 15.11.89 was issued by the Assistant Commissioner of Central Excise. By adjudication order dated 27.12.2004, the Assistant Commissioner of Central Excise confirmed the demand of duty and imposed penalty of equal amount under Rule 173Q of Central Excise Rules 1944. The Commissioner (Appeals) upheld the adjudication order.

(2.) THE learned Counsel on behalf of the appellant submits that photocopy to show cause notice was served to the appellant on 25.11.2004 and therefore the demand is barred by limitation. He further submits that the shortage is less than 2% which is condonable by Board Circular No. 261/15/82 -CX -8 dated 18.07.03. He relied upon the decision of the Tribunal in the case of U.P. State Sugar Corporation Ltd. v. CCE, Meerut reported in 2006 (206) ELT 677 (Tri.Del.). He also submits that the show cause notice was issued on 25.09.89 and photocopy of this notice was served on 25.11.2004 and there is no allegation of clandestine removal of the goods and therefore imposition of penalty is not justified.

(3.) HOWEVER , I find force in the submission of the learned Counsel in respect of imposition of penalty. It is a case of detection of shortage during the stock verification. There is no evidence of clandestine removal of the goods. Further, there is a long delay of the adjudication proceedings and therefore imposition of penalty is not warranted. Accordingly, penalty is set -aside. The impugned order is modified accordingly.