HYVOLT ELECTRICALS Vs. C.C.E. NEW DELHI

JUDGEMENT

(1.) THE facts in this case are that the appellants manufacture Copper wire bars/ingots, copper wire of refined copper and enamelled insulated winding wire of copper falling under Chapter Tariff Heading No. 7407, 7408 and 8544 respectively. They were availing modvat credit on the inputs under Rule 57A. On 8.12.96, their unit premises were visited by the Central Excise party. On physical stock taking, 87962.220 kgs. of copper cathode (raw material) valued at Rs. 83,56,411.00 involving Central Excise duty of Rs. 12,53,462.00 were found in excess of the recorded balance in their Form IV/57 -F(3) Register. Also 4521.050 kgs. and 3272.150 kgs. of copper wire finer than 6 mm was found short of the recorded balance in these Register. Shri Yogesh Mittal, Partner of the appellants in this statement of even date deposed that the raw material found in excess was received in their factory on 7.12.96 form ICD, Tughlaqabad on behalf of M/s. Veekay General Industries, Delhi without cover of challans/Bill of Entry etc. He stated that these goods belonged to M/s. Veekay General Industries. The shortage of the above said other raw material was also admitted by Shri Yogesh Mittal and he voluntarily debited an amount of Rs. 1,13,000/ - in their RG. 23A Pt.II account and a sum of Rs. 22,000/ - in their PLA on the spot. The excess found goods were however put under seizure.

(2.) THE appellants were issued a show cause notice dt. 5.6.97 by the Commissioner of Central Excise, Delhi -I, in which they were called upon to show cause why the seized goods should not be confiscated under Rule 173Q of Cental Excise Rules, 1944 and why the Central Excise duty amounting to Rs., 1,46,123.00 should not be demanded from them in respect of shortage of 7793.200 kgs. of copper wire finer than 6 mm and why penalty should not be imposed on them under Rule 173Q. Shri Yogesh Mittal, Partner of the appellants was called upon to show cause why penalty should not be imposed on him under Rule 209A.

(3.) THE above proceedings culminated in Commissioner, Cental Excise passing an Order dt. 27.4.2000, in which he confirmed the demand of Rs. 1,46,123.00 on the appellants since an amount of Rs. 1,35,000.00 had already been paid by the party, he ordered for appropriation of the same against the confirmation of the demand on them. He asked the party to pay the interest on the balance amount of Rs. 11,123.00 under Section 11A. He further imposed a penalty of Rs. 1,50,000.00 under Rule 173Q on them. He, in his order however, vacated the seizer of 81,374 kgs. of copper cathode and also observed that no penalty was liable to be imposed on Shri Yogesh Mittal.