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2017 (9) TMI 1550 - AT - Central ExciseClandestine removal - Penalty u/s 11AC - shortage of stock detected during stock verification - Held that - Shri Gajanand Sharma, Supervisor and authorized signatory of the appellant, in his statement, admitted the clearance of goods of shortage quantity were not recorded in the statutory records & Registers - it is clearly evident that the goods in question were cleared clandestinely - demand of duty with interest justified. The impugned order is upheld subject to the appellant being entitled to the option to pay penalty of 25% of duty as determined, within 30 days from the date of receipt of this order - decided partly in favor of appellant.
Issues:
Imposition of penalty under Section 11AC of the Central Excise Act, 1944 for shortage detected during stock verification. Analysis: The case involved a joint stock verification where a shortage of 97.725 MT of MS ingots was found, and the authorized signatory of the company admitted that the clearance of the shortage had not been recorded in statutory registers. The appellant paid an interim amount of duty, and a Show Cause Notice was issued proposing a demand of duty along with interest and penalty. The Adjudicating Authority confirmed the duty demand, imposed penalty under Section 11AC, and appropriated the deposited amount. The Commissioner (Appeals) rejected the appeal. The consultant for the appellant argued against the imposition of penalty under Section 11AC, claiming the stock verification was not conducted properly. Various case laws were cited to support this argument. However, the Tribunal found that the authorized representative admitted to the clandestine removal of the shortage quantity, justifying the demand of duty, interest, and penalty under Section 11AC. It was noted that the lower authorities did not provide the option of a penalty of 25% of the duty as determined under Section 11AC. Ultimately, the Tribunal upheld the impugned order but granted the appellant the option to pay a penalty of 25% of the duty within 30 days from the date of the order. The appeal was disposed of accordingly.
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