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2007 (12) TMI 392 - AT - Central Excise
Issues involved: Central Excise duty demand, limitation period, shortage of molasses, penalty imposition.
Central Excise Duty Demand: The appellants, engaged in the manufacture of V.P. Sugar and Molasses, faced a demand of duty amounting to Rs. 79,427.88 due to a shortage of molasses discovered during a factory visit by Central Excise Officers in 1989. The Assistant Commissioner confirmed the duty demand and imposed an equal penalty under Rule 173Q of Central Excise Rules, 1944, which was upheld by the Commissioner (Appeals). Limitation Period and Shortage of Molasses: The appellant argued that the demand was time-barred as the photocopy of the show cause notice was served in 2004, beyond the limitation period. They also contended that the shortage was less than 2%, which could be condoned as per a Board Circular. The appellant cited a Tribunal decision and emphasized that there was no allegation of clandestine removal of goods, questioning the justification for penalty imposition. Penalty Imposition: The Revenue maintained that the demand was not time-barred as the appellant received the corrigendum to the show cause notice in 1989 and did not raise any objections. They argued against the applicability of duty remission due to the shortage detected during stock verification. The Tribunal agreed that the appellant received the corrigendum in 1989, rejecting the argument of non-receipt of the notice. The Tribunal upheld the duty demand, stating that the appellant failed to apply for duty remission and should have maintained proper records despite the delay in adjudication proceedings. Penalty Imposition (Continued): While upholding the duty demand, the Tribunal found merit in the appellant's argument regarding penalty imposition. Given the absence of evidence of clandestine removal and the significant delay in adjudication, the Tribunal set aside the penalty, stating that it was not warranted in this case. Consequently, the impugned order was modified to reflect the setting aside of the penalty.
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