2011 (1) TMI 1304 - AT - Central Excise

Summary

Issues involved: Appeal against the order of the Commissioner (Appeals) regarding shortage of grey yarn, duty payment, penalty imposition, and option for reduced penalty u/s 11AC.

Shortage of grey yarn and duty payment: The officers found a stock shortage of grey yarn during a visit to the factory premises. The partner admitted the shortage and clarified that the goods were cleared after dying to customers without payment of duty. Duty amount was paid subsequently. The original authority confirmed the demand and imposed a penalty, which was upheld by the Commissioner on appeal.

Contentions and arguments: The appellant claimed that the stock taking was defective as it did not account for materials issued for processing. The appellant argued that the demand was based on assumption and presumption, and the partner's statement was taken under pressure. The appellant cited Tribunal decisions to support their case.

Clandestine removal: The Respondent reiterated that the case involved clear and admitted clandestine removal of goods.

Option for reduced penalty: The appellant sought an option to pay reduced penalty u/s 11AC, citing a decision of the Delhi High Court. The Tribunal considered the submissions and records, noting the partner's admission of clearance without duty payment and the lack of retraction of the statement. The Tribunal found the appellant's claim of shortage due to unaccounted processing materials to be an afterthought and rejected the appeal.

Decision: The appeal was rejected, but the appellant was granted an option to pay a reduced penalty of &8377; 69,783.75 within 30 days. Failure to pay within the specified time would result in a penalty of &8377; 2,79,135.