CCE Vs. BEE DEE STEEL ROLLING MILLS AND

JUDGEMENT

(1.) Revenue has filed these two appeals against the Order -in -Appeal No. 422 -423/03 dated 13.6.2003, by which the Commissioner (Appeals) has set aside the confiscation of the goods as well as the trolla and imposed penalties on both the respondents.

(2.) When the matter was called, no one was present on behalf of the respondents. As the appeals have been adjourned on couple of occasions, we heard Shri Vikas Kumar, learned SDR for the Revenue and perused the records. The learned SDR submitted that during the course of road check on 6.8.1997, a trolla was intercepted by the Central Excise officers; that the trolla was carrying bars and rods cleared from the premises of M/s. Bee Dee Steel Rolling Mills without any documents; that the quantity in trolla was 22.480 MT, which was seized alongwith trolla for further action under the Central Excise law; that the physical verification of the finished stock on 8.8.1997 at the premises of the first respondent, revealed shortage of 340.541 MT of bars and rods; that one Shri Mohar Singh, Director and Authorised Signatory of the respondent No. 1, stated in his statement on 8.8.97 that the said shortage included the goods seized from the trolla; that Shri Mohar Singh could not give any satisfactory explanation for this shortage and voluntarily debited Central Excise duty on the entire quantity on 8.8.97 itself; that the Additional Commissioner, under the Order -in -Original No. 31 /CE/ADC/2001 dated 4.9.01, confirmed the demand of duty had imposed penalty of the equivalent amount on M/s. Bee Dee Steel Rolling Mills, confiscated bars and rods seized from the trolla, confiscated trolla and imposed a redemption fine of Rs. 50,000 and also imposed a penalty of Rs. 10,000 on Shri Sukhwant Singh, owner of trolla; that the Commissioner (Appeals), however, under the impugned order, has set aside the Order -in Original. The learned SDR, further, submitted that Mohar Singh, Director and Authorised Signatory of respondent No. 1 could not explain the reasons for shortages detected by the Central Excise officers; that, therefore, the finding of the Commissioner (Appeals) that the goods were being cleared under the supervision of the Bank and there was no possibility of any evasion to evade any duty, is contrary to the facts; that such an explanation is nothing but an after thought advanced by the respondents after lapse of 2 and half years of the seizure of the goods; that the R.G. 1 register of the assessee was found written upto opening balance on 5.8.97; that they had neither issued any excise invoice nor had reflected any clearances of excisable goods in their R.G. 1 register or other records since 1.8.97; that in view of the evidence available on records, the goods found short, had been removed before 1.8.97 and the duty is payable @ 15% ad.V. and not at the reduced rate of Rs. 300 PMT being effected from 1.8.97. He, finally submitted that the penalty is imposbale on both the respondents; that the penalty is imposable on M/s. Bee Dee Steel Rolling Mills as they had removed the goods without payment of duty and on the owner of the trolla as the goods were taken without any document; that for the same reasons, the goods found in trolla and trolley are liable for confiscation.

(3.) We have considered the submissions of SDR and perused the records. Revenue has not brought any evidence of material to show that the goods found short in the factory premises were cleared before 1.8.97. They are only presuming that these goods had been removed before 1.8.97. Rule 9A of the Central Excise Rules, 1944 provides the date for determination of rate of duty at the material time. As per the provisions of Sub -rule (1) of Rule 9 A, the rate of duty will be the rate in force on the date of the actual removal of the goods. Sub -rule (5) of Rule 9A provides that in all other cases the rate of duty applicable shall be the rate in force on the date on which the notice for demand of duty is issued or on the date on which the duty is paid, whichever is earlier, in the present matter, the actual date of removal is not available and as such the provisions of Sub -rule (5) to Rule 9A are attracted to decide the rate of duty. Respondent No. 1 has paid the duty on 8.8.97 and accordingly, the rate in force on the date shall be the rate on the basis of which the duty is to be paid. We, however, find substantial force in the submissions of the learned SDR that the goods found in trolla without any duty -paying documents are liable to confiscation as no proof has been brought on record by the respondent No. 1 that these goods had been removed on payment of duty. The mere fact that an officer of the bank was accompanying the goods, does not absolve the respondent No. 1 from payment of duty before removing the goods from the factory. We, therefore, uphold the confiscation of the bars and rods weighing 32.480 MT. However, we find that the redemption fine imposed by, the Additional Commissioner is on the higher side. We reduce the redemption fine to Rs. 20,000. A penalty on M/s. Bee Dee Steel Rolling Mills is imposable as the excisable goods weighing 340.541 MT were found short in the factory. The interest of justice will be made if a penalty of Rs. 50,000 is imposed on M/s. Bee Dee Steel Rolling Mills. We order accordingly. We, however, do not find any reason to either confiscate the trolla or to impose any penalty on respondent No. 2, Shri Sukhwant Singh in absence of any material to show that Sukhwant Singh or the driver of the trolla were knowing that the goods, in question, were liable for confiscation. We, therefore find no reason to interfere with the impugned order in this regard. Both the appeals stand disposed of in the above terms.