2011 (5) TMI 492 - AT - Central Excise

Demand of differential duty - 100% EOU engaged in the manufacture of Textured/Crimped Yarn and knitted Fabrics - shortage of 28028 Kgs of imported POY out of which 20325Kgs - appellants have admitted the illicit removal of 28028 Kgs imported POY and the major portion of raw material was actually found stored at the appellant s unit NO. 3. - Demand of duty invoking extended period of limitation upheld.

Summary

Issues:
1. Shortage of imported POY noticed during stock verification.
2. Demand of duty, interest, and penalty imposed on the appellant.
3. Separate penalty imposed on the manager and authorized signatory.
4. Challenge against the Commissioner (Appeal)'s order.

Analysis:

Issue 1: Shortage of imported POY noticed during stock verification
The appellant, a 100% EOU engaged in manufacturing, faced a shortage of 28028 Kgs of imported POY during stock verification. The appellant admitted to the illicit removal of the imported POY, with a major portion found stored at Unit No. 3. The involvement of specific individuals was established based on recorded statements and circumstantial evidence.

Issue 2: Demand of duty, interest, and penalty imposed on the appellant
A show cause notice was issued demanding the payment of differential duty due to the shortage of imported POY. The original adjudicating authority confirmed the demand of Rs. 2,57,253/- along with interest and imposed an equal amount of penalty. The Commissioner (Appeal) upheld this order, leading to the appellant filing an appeal against it.

Issue 3: Separate penalty imposed on the manager and authorized signatory
In addition to the penalty imposed on the appellant, a separate penalty of Rs. 50,000/- was imposed on Shri Sayed Shabbir Hussainmiya, the manager, and authorized signatory. The active involvement of specific individuals was established through various statements and circumstantial evidence.

Issue 4: Challenge against the Commissioner (Appeal)'s order
The appellant challenged the order of the Commissioner (Appeal) in the appeal filed. The appellant contended that there was a delay in the issuance of the show cause notice after the completion of the enquiry. However, it was established that the show cause notice was issued within the time limit, well within five years from the date of the visit of officers to the factory.

In the judgment, it was noted that the appellant's advocate conceded to the facts of the case during arguments. The order in original was found to be well-supported both factually and legally. Consequently, the appeal filed by the appellant was rejected, affirming the decision of the Commissioner (Appeal).

*(Pronounced in the Court)*