2007 (5) TMI 542 - AT - Central Excise

Summary

Issues: Reduction of penalty on the appellant company, imposition of penalty on Shri N.C. Patel, clearance of inputs to godown without reversal of credit.

Analysis:

The case involved an appeal against the order of the Commissioner (Appeals) regarding the shortage of input for which credit had been taken. The appellant company admitted the shortage and non-availability of raw materials, leading to the payment of duty. Subsequently, it was claimed that the raw materials were actually in their godown, away from the factory premises. The original authority confirmed the demand and imposed penalties on the company and Shri N.C. Patel, the General Manager. The Commissioner (Appeals) reduced the penalty on the company but maintained the penalty on Shri N.C. Patel.

Upon careful consideration, the judge noted two possibilities: either the raw material was not received in the factory, and credit was wrongly taken, or the inputs were received but later cleared to the godown without reversing the credit. The judge found the claim of goods being in another location after the shortage was found unacceptable. However, considering the circumstances, the judge decided to show leniency on the penalties imposed.

Consequently, the penalty on the appellant company was reduced from Rs. 50,000 to Rs. 25,000. The penalty on Shri N.C. Patel was set aside, as no personal involvement or motive in the offense was found. The judge allowed the appeal partly for the appellant company and fully for Shri N.C. Patel, indicating a reduction in penalties and a complete removal of penalty for the latter.