2018 (5) TMI 98 - AT - Central Excise

Clandestine removal - shortages in the stock of finished goods - Held that - the duty involved on shortages in the stock of finished goods had been paid by the appellant on the date of visit of the officers and explaining the reasons of shortages, the Authorized Signatory Shri Yogesh D Patel, in his statement dated 09.12.2011 informed that the goods were cleared without payment of duty, which was later, confirmed by the Director. The order of the Ld. Commissioner (Appeals) upheld, except the quantum of penalty imposed on the Director which is found to be excessive, is reduced. Appeal allowed in part.

Summary

Issues:
Appeal against Order-in-Appeal regarding central excise duty, interest, and penalty imposed on company and director for clearing goods without payment of duty.

Analysis:
The appeals were filed against the Order-in-Appeal passed by the Commissioner (Appeals) of Central Excise, Customs & Service Tax-Vapi. The shortages in the stock of finished goods were noticed during a visit to the factory, where it was revealed that goods were cleared without payment of duty. A show cause notice was issued for recovery of central excise duty, interest, and penalty, including personal penalty on the director. The demand was confirmed with interest and penalty by the adjudicating authority. The appeals were filed before the Ld. Commissioner (Appeals), who rejected them, leading to the present appeals.

During the proceedings, the Authorized Signatory confirmed that the goods were cleared without payment of duty, which was later corroborated by the Director. The duty involved in the shortages had already been paid by the appellant on the date of the officers' visit. The Hon'ble Member (Judicial) found no reason to interfere with the order of the Ld. Commissioner (Appeals) except for the quantum of penalty imposed on the Director, which was deemed excessive and disproportionate. Consequently, the penalty on the Director was reduced to ?25,000. The appeals were disposed of accordingly.

In summary, the appeals were primarily focused on the recovery of central excise duty, interest, and penalties imposed on the company and director for clearing goods without payment of duty. The appellate tribunal upheld the order of the Ld. Commissioner (Appeals) but reduced the penalty on the Director due to being excessive and disproportionate.