JAIN STEEL INDUSTRIES Vs. CCE

JUDGEMENT

(1.) THE relevant facts of the case in brief are that the appellants are engaged in the manufacture of Iron and Steel Products classifiable under the Chapter 72 of schedule to the Central Excise Tariff Act 1985. On 11th July 2003, the Central Excise officers visited the appellant's factory and verified the stock of finished goods and raw material. There was a shortage of raw materials of 7.055 M.T. was found. Shri Kuldeep Kumar in his statement stated that the shortage was occurred due to the reasons that they have not physically verified the stock over a period of time and it is due to burning loss. It is also noticed that the appellants cleared galvanized DLB Steel structure at nil of duty to M/s DMRC Limited, New Delhi by availing exemption Notification No. 29/03 dated 01/04/03 but they have not reversed the amount of 8% as required under Rule 6(3)(b) of Cenvat Credit Rules 2002. The Adjudicating Authority confirmed demand of duty of Rs. 1,01,293.00 and imposed penalty of equal amount along with interest and also imposed penalty of Rs. 5,000.00 on Shri Kuldeep Kumar, authorized signatory of the appellant. Commissioner (Appeals) dropped the penalty on Shri Kuldeep Kumar and upheld the adjudication order against the appellant.

(2.) THE learned advocate on behalf of the appellant submits that the shortage was detected during stock verification and there is no evidence of clandestine removal of the inputs. Therefore, demand of duty and penalty are not maintainable. He further submits that the demand of duty of Rs. 85,378.00 for violation of Rule 6(3)(b) of Cenvat Credit Rules is absolutely time barred as appellant vide his letter dated 11/06/03 informed the clearance of the said goods and the notice was issued on 2nd July 2004 beyond the normal period of limitation. He further submits that in this case goods were supplied for projects funded by International organization and therefore reversal of amount under Rule 6(3)(b) of Cenvat Credit Rules does not arise. In any event, he submits that there is no intention to evade payment of duty and therefore imposition of penalty is under Section 11(AC) of Central Excise Act, 1944 is not justified.

(3.) THE learned DR reiterates the findings of the Commissioner (Appeals). He submits the shortage of the raw material was admitted by the appellant and therefore demand of duty and penalty are justified. He further submits that there is no dispute the appellant removed exempted goods without reversing the amount under Rule 6(3)(b) of the Rules and they have not maintained the separate account. So, the demand of the amount of Rs. 85,378.00 and imposition of penalty are correct.