2017 (6) TMI 763 - AT - Central Excise

Shortage of finished goods and raw material - clandestine removal - Held that - the appellant has not been able to prove that there was no shortage of finished goods and they did not clear the said goods clandestinely without payment of duty - Once the Chief Executive officer of the appellant assessee viz. Shri D.G.K. Nair admitted the shortage and appellant assessee paid the duty for the goods found short voluntarily, the plea of the appellant now that there was no shortage does not have sound footing. The Hon ble Supreme Court in the case of CCE Vs. Systems & Components Pvt. Ltd. 2004 (2) TMI 65 - SUPREME COURT OF INDIA observed that it is basic and settled law that what is admitted need not be proved. Appeal dismissed - decided against assessee.

Summary

Issues:
Appeal against confirmation of duty and penalty for shortage of finished goods in steel pipes and tubes.

Analysis:
The appellant, a manufacturer of steel pipes and tubes, faced a shortage of finished goods during a stock verification, leading to the remittance of duty amounting to ?1,66,551 through Cenvat credit account. The Department issued a show cause notice, resulting in the confirmation of duty and penalty through Order-in-Original No.02/2014. The Commissioner (Appeals) upheld the duty and penalty, prompting the appellant to appeal before the Tribunal.

During the hearing, the appellant's advocate argued that the admission of the chief executive officer should not hold evidentiary value, citing a decision of the Hon'ble Allahabad High Court. However, the Tribunal found that the appellant failed to prove the absence of the shortage or that the goods were not cleared clandestinely without duty payment. The admission of the shortage by the chief executive officer, coupled with the voluntary payment of duty, weakened the appellant's plea. Citing precedents, including a Supreme Court case, the Tribunal emphasized that what is admitted need not be proved.

Referring to judgments by various High Courts, the Tribunal highlighted the significance of unretracted statements and independent witnesses in cases of shortages and duty violations. The Tribunal dismissed the appellant's reliance on case law, stating that the impugned order was sustained based on the principles established by the Supreme Court and High Courts. Consequently, the appeal was dismissed as lacking merit.

In conclusion, the Tribunal upheld the confirmation of duty and penalty against the appellant for the shortage of finished goods in steel pipes and tubes, emphasizing the legal principles regarding admissions, shortages, and duty violations as established by relevant case laws and court decisions.