CCE Vs. DHILLON KOOL DRINK BEVERAGES

JUDGEMENT

(1.) THE respondent in the present appeal M/s Dhillon Kool Drinks and Beverages Ltd., Panipat are a manufacturer of aerated water beverages syrup which are liable to Central Excise duty. On 10.6.99 the Central Excise Officers visited the factory premises of the respondent and carried out stock taking of finished goods. A shortage of aerated water bottle valued around Rs. 11 lakhs and involving a duty of about Rs. 6 lakhs was found compare to the balance quantity recorded in the appellant's statutory production record (RG -I register). The respondent's Account Manager admitted the shortage and stated that "shortage have been due to peak season work load and the lapse on the part of their staff. Respondent also made a voluntary debit of duty of over Rs. 3 lakhs on the same date. The remaining amount was debited on 5.7.99. Five months after that, show cause notice was issued seeking to confirm the duty already paid and to impose penalty on the appellant under Rule 173Q of the Central Excise Rules read with Section 11 AC of the Central Excise Act. In adjudication, the notice was confirmed in its entirety.

(2.) THE assessee took up to the matter in appeal before Commissioner (Appeals) Central Excise. That Commissioner upheld the duty demand but set aside the penalty on the ground that, when duty was paid before passing of an order under Section 11 A(2) of the Central Excise Act, no penalty was attracted, in support of this, the Commissioner also relied on the decision of CEGAT in the case of Amritsar Crown Caps (P) Ltd. v. CCE, Chandigarh 2002 (140) ELT 437. The present appeal is directed against that order, canvassing that setting aside of penalty was incorrect.

(3.) PENALTY under Section 11AC or 173Q is for evasion of Central Excise duty through fraud, suppression of facts etc. In the present case, what was observed by the Central Excise Officer that the stock according to books was more than the physical stock. The assessee also explained that, on account of peak season work load, lapse had taken place on the part of the staff. The show cause notice also did not go beyond observing the physical shortage and the appellant's explanation. This, there is no evidence showing any deliberate acts to evade Central Excise duty. In fact, instead of suppression of production, the books of accounts are found to state production in full. The appellant's explanation about lapse on the part of the staff would appear to explain non -payment of duty before the clearance of the goods. In these facts and circumstances, the Commissioner's order cannot be found fault with. The appeal fails and is rejected.