KARTAR STEELS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The appellants manufacture steel ingots from steel scrap. On 17 -5 -94 their factory premises were visited by the Central Excise staff of Amritsar Division. On verification of the finished goods, it was ascertained that there was an excess of 25 pieces of steel ingots weighing 2456.250 kgs. as against the balance recorded in their RG. 1 Register. Accordingly, these ingots valued at Rs. 21,615/ - were seized. The visiting officers also found shortage of 35.280 MTs of steel scrap valued at Rs. 3,10,464/ -, Accordingly they were issued a show cause notice dated 14 -11 -94 by the Asstt. Collector of Central Excise, Amritsar in which it was alleged that the party had removed the steel scrap found short after converting it into steel ingots and cleared them without payment of duty amounting to Rs. 46,570/ - in violation of the provisions of Rules 9(1), 52A, 53, 173G and 226 of the Central Excise Rules, 1944 is liable to be recovered from them under Rule 9(2) and under Section 11A of the Central Excise Act, 1944. In respect of the finished goods viz., steel ingots found in excess, it was alleged that the seized goods were kept unaccounted for in contravention of Rules 53, 173G and 226 and they were liable to be confiscated under Rule 173Q and Rule 226. They were therefore called upon to show cause why the seized goods should not be confiscated and why the Central Excise duty amounting to Rs. 46,570/ - on 35.280 MT of iron and steel scrap found short which were converted into steel ingots and removed without payment of duty should not be recovered from them. They were further called upon to show cause why penalty should not be imposed on them under Rules 9(2), 52A, 173Q and 226 of Central Excise Rules, 1944.

(2.) On considering the reply of the party, the Deputy Commissioner of Central Excise, Chandigarh -II vide his Order dated 22 -5 -98 confirmed the duty of Rs. 46,570/ - on the steel ingots alleged to have been obtained on conversion of the steel scrap and removed without payment of duty. He also ordered for the confiscation of the steel ingots weighing 2456.250 kgs found in excess and seized but since the goods had already been released under bond to the party, he imposed a fine of Rs. 3,500/ - in lieu of confiscation on them. The adjudicating authority also confirmed a duty of Rs. 3,242/ - for these ingots. The appellants were further subjected to a penalty of Rs. 40,000/ -.

(3.) The party filed an appeal but the Commissioner (Appeals), Chandigarh vide his Order dated 20 -1 -2001 rejected their appeal with the following observation: