AAR KAY INDUSTRIES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The above captioned two appeals have been filed by the appellants against the impugned order -in -appeal vide which the Commissioner (Appeals) has affirmed the order -in -original regarding confirmation of duty and imposition of redemption fine and penalties as detailed therein. The learned Counsel has contended that duty of Rs. 1,05,3217 - could not be legally confirmed against the appellants on the ground of clandestine removal of the goods, for want of any tangible evidence. (No presumption regarding the clandestine removal of the goods, as per the Counsel, could be drawn by applying the average weight of each type of joists/angle channels per foot to the entire stock lying in the factory premises). Therefore, the impugned order in this regard deserves to be set aside. On the other hand, the learned SDR has reiterated the correctness of the impugned order by contending that the director of the appellants company did raise objections regarding the mode adopted by the officers for calculating the shortage of the goods and as such the duty has been rightly confirmed against the appellants.

(2.) In my view, the contention raised by the Counsel deserves to be accepted. The perusal of the record shows that the clandestine removal of the goods has been assumed on the basis of the shortage found at the time of physical verification of the stock by the officers of the Central Excise. But no physical verification was carried out. In tact, average weight of each type of joists/channels manufactured by the appellants per feet was worked out and applied to the total weight of each type of joists/channels. The method adopted, was, number of pieces x size of joists (in ft.) x weight of joists per ft. (in Kgs). By adopting this calculation, the officers worked out the shortage of the finished goods and duty demand was accordingly raised by presuming that this shortage was on account of clandestine removal of the goods. But this procedure could not be legally adopted for raising the duty demand on the ground of clandestine removal of the goods. The fact that Ramesh Goyal, Director of the appellants did not object to this method, did not provide evidence for presuming clandestine removal of the goods, some more corroborative evidence was required to be collected by the Department in that regard. There is nothing on the record to suggest if statement of any buyer was recorded to whom the appellants had sold the goods in a clandestine manner without payment of duty. No statement of any supplier of raw material to the appellants was recorded and utilisation of the same in the manufacture of the goods by the appellants, had not been inquired into Therefore, the impugned order confirming the duty demand of Rs. 1,05,321/ -cannot be sustained and is set aside. However, the impugned order confirming the duty of Rs. 16,383/ - on the goods seized from the truck outside the factory gate of the appellants, has not been disputed as the duty had already been paid by the appellants. The redemption fine in respect of those goods is reduced to Rs. 5,000/ - and penalty is reduced to Rs. 5,000/ -. The confiscation of the truck is however set aside as the appellants had paid the duty and the truck was standing outside the factory.

(3.) In view of the discussion made above, the impugned orders accordingly stands modified. The appeals of the appellants stands disposed of in the above terms.