RADHIKA STEEL INDUSTRIES Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE assessee -appellant has filed the instant appeal under Section 35G of the Central Excise Act, 1944 (for brevity, 'the Act'), against the order dated 26 -8 -2011 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for brevity 'the Tribunal'), upholding the penalty under Rule 25 of the Central Excise Rules, 2002 and redemption fine. However, the Tribunal has reduced the redemption fine from Rs. 2,00,000/ - to Rs. 1,50,000/ - and penalty from Rs. 90,317/ - to Rs. 50,000/ -. Brief facts of the case are that the assessee -appellant is engaged in the manufacture of non -alloys steel products falling under Chapter 72 of Schedule to Central Excise Tariff Act, 1985. On 9 -2 -2005, a team of the officers of the Central Excise visited the factory premises of the assessee -appellant. At that time, Shri Suresh Kumar, Proprietor of the assessee -appellant was present. From the scrutiny of the records produced by him it was revealed that 96.838 MTs (finished goods) and 42.650 MTs Steel Ingots (raw material) was accounted for as balance. After physical verification of raw material as well as finished goods it was found that the assessee -appellant had contravened the provisions of Rule 10 of the Central Excise Rules, 2002 (for brevity, 'the Rules'), inasmuch as, a quantity of 31.331 MTs of MS Bars (finished goods) was found in excess of recorded balance of stocks, which were manufactured with the intention to remove clandestinely without payment of Central Excise duty. The weighment/verification charts were prepared on the spot, which were duly signed by Shri Suresh Kumar.

(2.) AFTER explaining the provisions of Section 14 of the Act, his statement was also recorded on 9 -2 -2005 in which he admitted the excess stock (P -1). The reason for the excess stock explained by him in the statement was that the raw material i.e. re -rollable iron and steel was purchased on cash sale basis from the local market without purchase invoices and the manufactured finished goods out of such material were not entered in the RG -I register obviously because the raw material was not accounted for in the records. He also stated that those MS Bars were to be cleared without payment of duty and without issuance of any invoice. The goods found in excess were seized under Rule 24 of the Rules read with Section 110 of the Customs Act, 1962. On 14 -2 -2005, the proprietor of the assessee -appellant sent a letter to the range Superintendent Central Excise, Mandi Gobindgarh, retracting from his statement dated 9 -2 -2005. It has been clarified that the variation in stock was due to misreporting of the illiterate labour to the excise clerk. There was no purchase of raw material except for those recorded in the raw material register (P -2).

(3.) THE assessee -appellant filed an appeal against the Order -in -Original before the Commissioner (Appeals), who set aside the confiscation and redemption fine, vide order dated 28 -8 -2006 (P -5). Feeling aggrieved, the revenue -respondent preferred an appeal against the order dated 28 -8 -2006 before the Tribunal and the matter was remanded back vide order dated 7 -4 -2008 (P -6). On 7 -11 -2008, the Commissioner (Appeals) confirmed the Order -in -Original (P -7). This time, the assessee -appellant filed an appeal before the Tribunal against the order dated 7 -11 -2008, passed by the Commissioner (Appeals). On 26 -8 -2011 (P -8), the Tribunal partly allowed the appeal filed by the assessee -appellant by observing as under: -