2013 (12) TMI 569 - AT - Central Excise

Clandestine removal of cement - Excess quantity of Cement found in some bags Held that - Following C.C.E. v. Sagar Cements Ltd. 2004 (10) TMI 208 - CESTAT, BANGALORE - The weighment of 10 bags were conducted in the premises and it was found that the bags were of the weight 51.070 kgs. 700 gms. is the weight of the bags hence the total quantity in excess is only one kg. - As per Board s Circular dated 20-10-2008 the variation of 1% is allowed for cement filled in bag for the purpose of levy of Central Excise duty - as per the Standards of Weights and Measures (Packaged, Commodities) Rules, 1977 the maximum permissible error in relation to the packing is 2% in respect of cement bag. The Managing Director in his statement had never admitted that they were clearing the cement in excess to the quantity packed in the bags clandestinely and receiving consideration in respect of excess quantity - The respondent were clearing showing weight of the bag is 50 kg. and paying duty on 50 kgs. Decided against Revenue.

Summary

Issues:
- Appeal against order-in-appeal passed by Commissioner (Appeals)
- Confiscation of excess cement bags and imposition of penalties
- Discrepancy in weight of cement bags and duty payment
- Interpretation of Circular No. 876/14/2008 and Standards of Weights and Measures Rules
- Allegations of clandestine clearance and intention to clear goods in excess
- Precedent set by the case of C.C.E. v. Sagar Cements Ltd.
- Application of permissible error limits in weighment of cement bags
- Admissibility of statements made by Managing Director

Analysis:
The judgment pertains to appeals filed against the order-in-appeal passed by the Commissioner (Appeals). The case involves the confiscation of excess cement bags and imposition of penalties based on discrepancies in the weight of cement bags and duty payment. The Revenue contended that the respondent admitted clearing excess cement and should pay duty accordingly. However, the respondent argued that the excess quantity was minimal and fell within permissible limits as per Circular No. 876/14/2008 and Standards of Weights and Measures Rules.

The respondent denied any clandestine clearance and maintained that the excess quantity was due to losses during loading and unloading. Reference was made to the decision in C.C.E. v. Sagar Cements Ltd., where a similar variation was allowed. The judgment highlighted that the weighment discrepancy was only 1%, within the permissible error limits of 2% for cement bags. The Managing Director's statement was crucial, as it did not admit to intentional excess clearance.

Ultimately, the Tribunal dismissed the Revenue's appeals, citing compliance with the Board's circular, Standards of Weights and Measures Rules, and the precedent set by the Sagar Cements Ltd. case. The judgment found no fault in the impugned order, emphasizing the negligible nature of the weighment discrepancy and rejecting the Revenue's claims. The decision was based on legal provisions and established precedents, ensuring a fair and just resolution in the case.