ISPAT STRUCTURALS (P) LTD. Vs. CCE, CHANDIGARH

JUDGEMENT

(1.) This stay application arises out of appeal no. E/713/2001 -NB filed by the appellants against the impugned order -in -appeal dated 29.12.2001 vide which the Commissioner (Appeals) had confirmed the penalty of Rs. 2 lakh.

(2.) The appellants wee engaged in the manufacture of non -alloy steel products and were paying duty under the compounded levy scheme since 1.11.1997 in terms of Section 3 -A of the Central Excises Act, 1944. They, however, applied for switching over from compounded levy to modvat scheme. On visit by the Central Excise Officers, it was found the 'D' parameter of the mill had been changed from the declared 409mm to 430 mm. On verification of the stock of goods, the Central Excise Officers further found shortage of 147.694 MT and 13.935 MT of finished goods and raw material respectively. A penalty of Rs 2 lakh had been imposed on them as they contravened the provisions of Rule 4(2) of Hot Re -rolling Steel Mills (HRSM) Annual Capacity Determination Rules, 1997 under which the appellants were required to intimate about the proposed change of the parameter to the Commissioner at least one month in advance and to obtain his written approval before making the change in the capacity already determined.

(3.) Through the stay application, the appellants have sought total waiver of the penalty amount on the ground that on account of the change of 'D' Parameter, the production capacity of the mill stood enhanced and that no shortage of raw material or finished goods was actually found, as no physical verification was done. The learned counsel for the appellants has reiterated these grounds before us. He has further contended that the appellants are facing financial hardship due to heavy losses. He has, however, offered to pre -deposit Rs 25,000/ - for the purpose of hearing of the appeal.