2017 (3) TMI 1506 - AT - Central Excise

Personal penalties on co-noticees - job-work - shortage of stock - clandestine removal - Held that - report submitted in reply to SCN was rejected on flimsy ground - the report furnished by the field formation on the correctness of the statement of the Appellant reconciling the difference in the physical stock and book balance carries due weight in adjudicating the case. Since a copy of the same has now been handed over to the learned Advocate for the Appellant, therefore, it is prudent to remand the matter to the Adjudicating Authority for deciding the issue afresh - appeal allowed by way of remand.

Summary

Issues:
Appeal against Order-in-Original (OIA) regarding shortage of raw materials and non-receipt of inputs leading to recovery of credit, interest, and penalties.

Analysis:
The case involves an appeal against OIA No.SRP/217/Vapi/2012-13 passed by the Commissioner (Appeals), C.Ex. & S.Tax, Vapi, regarding shortage of raw materials and non-receipt of inputs by the Appellants, who are engaged in manufacturing excisable goods. The officers found discrepancies during a surprise visit related to raw materials received for job work under CENVAT Credit Rules, 2004. A Show Cause Notice was issued for recovery of credit and penalties. The Adjudicating Authority confirmed the demand, including interest and penalties, which was upheld by the Commissioner (Appeals) with reduced personal penalties. The Appellants argued that a reconciliation statement was submitted during the personal hearing, and a verification report supported their claims. The Tribunal noted that the Adjudicating Authority did not consider the verification report before passing the order, and the Commissioner (Appeals) rejected it on flimsy grounds. The Tribunal decided to remand the matter to the Adjudicating Authority for a fresh decision, considering the report and all issues, providing a reasonable opportunity for the Appellants to be heard.

In the detailed analysis, the Tribunal emphasized the importance of the verification report in reconciling the differences in physical stock and book balance. The report, dated 17.04.2012 but signed on 03.05.2012, was not considered before passing the adjudication order. The Tribunal found the rejection of the report by the Commissioner (Appeals) on weak grounds and held that the report carries weight in adjudicating the case. Therefore, the Tribunal set aside the impugned order and allowed the appeals by way of remand, keeping all issues open for re-adjudication. The Tribunal directed the Adjudicating Authority to consider the report and all issues, including non-receipt of inputs, while providing a reasonable opportunity for the Appellants to present their case.