CCE Vs. HIM TECHNO FORGE LTD.

JUDGEMENT

(1.) THE relevant facts of the case, in brief, are that the respondents are engaged in the manufacture of forgings of iron and steel products classifiable under Chapter 72 of the Central Excise Tariff Act, 1985. On 26.12.1997, the central excise officers visited the factory of the appellants. They verified the stock of raw material and finished goods. The stock of finished goods were found tallied with R.G.1 stock ascertained by the officers on physical verification. But, there was shortage of raw material of Alloy Steel to the quantity of 21.692 MT wherein central excise duty involved Rs. 18,091 / -. The statement of the Director of the appellant company Shri N.K. Dalal was recorded who admitted the shortage and debited the duty in their RG -23A Part -II/PLA account on 26.12.1997. On scrutiny of the documents, it was noticed that there was a short payment of duty on 7.919 MT of Steel products on the basis of the private document dated 5.9.1997 wherein duty involved Rs. 28,508/ - In the adjudication order, the Joint Commissioner of Central Excise confirmed the demand of duty on shortage of raw material and adjusted the same amount as deposited by the appellant and imposed penalty of Rs. 10,000/ - under Rule 173Q of the Central Excise Rules for violation of various provisions of Central Excise Rules. He further confirmed the demand of duty of Rs. 28,508/ - and imposed penalty of equal amount. By the impugned order, the Commissioner (Appeals) set aside the adjudication order. Hence, the department filed the present appeal.

(2.) THE learned D.R. on behalf of the appellant submits that the Commissioner (Appeals) while allowing the appeal of the respondents failed to consider the fact that the stock of finished goods was arrived at in the presence of the independent panches and representative of the respondent. He submits that the respondent did not protest against the shortage noticed in the stock. He also submits that the demand of duty is not barred by limitation in as much as central excise officers detected shortage during stock verification and, therefore, he relied on the larger Bench decision of the Tribunal in the case of Nizam Sugar Factory v. CCE reported in 1999 (34) RLT 864. The learned D.R. also relied on the following case laws:

(3.) COURT -Room Highlightsaa 2001 (129) ELT A -93.