2002 (9) TMI 352 - AT - Central Excise

Summary

Issues Involved:
1. Duty of Excise demandable for goods shown short in RT-12 Returns by M/s. Choksi Tubes Co. Ltd.

Analysis:
The appeal in question addressed the issue of whether the duty of Excise is demandable from M/s. Choksi Tubes Co. Ltd. for goods shown short in RT-12 Returns. The Appellants contended that the loss in quantity of pipes and tubes, ranging from 2.5% to 3%, was a result of various processing activities such as drawing, plegiring, annealing, pickling, and others. They argued that this loss was reflected in their RT-12 Returns, indicating no mala fide intention. The Department, however, insisted that the product mentioned in the RT-12 returns were final products, not intermediate goods, and that no contemporaneous records were provided to substantiate the claimed processing losses.

The Tribunal noted that there was a shortage of 46.65 M.T. of S.S. seamless tubes and pipes, but found no evidence supporting the Appellants' assertion that the quantity of tubes and pipes was entered into the RG-1 register before undergoing the alleged processing. The absence of records like removal of goods from the store room or processing register weakened the Appellants' argument. Additionally, the Tribunal highlighted that the duty free removal for re-processing of goods accounted for in the RG-1 register should be clearly indicated, which was not done by the Appellants. Consequently, the Tribunal upheld the demand of excise duty as confirmed by the Commissioner (Appeals) but reduced the penalty imposed, acknowledging that the Appellants had disclosed the shortage in their RT-12 Returns. The Tribunal imposed a penalty of Rs. 1 lakh, considering the circumstances of the case and the Appellants' disclosure of the shortage.

In conclusion, the Tribunal found that the duty of excise was payable by M/s. Choksi Tubes Co. Ltd. as they failed to substantiate the claimed loss due to processing activities. While upholding the duty demand, the Tribunal reduced the penalty imposed on the Appellants, recognizing their disclosure in the RT-12 Returns.