2024 (9) TMI 832 - AT - Central Excise

Clandestine removal - 411 MT of Portland Cement - shortage of cement - absence of any stock taking not being conducted by the Department - HELD THAT - It is borne out of records that at the time of visit of Anti Evasion team on 01.02.2010, the Account s Manager, Shri Dinesh Agarwal had admitted that a quantity of 411 MT of cement were removed from their factory without payment of duty leviable on the value of the goods and sold in cash under the direction of Shri Samhu Agarwal, Director of the Appellant Company. Shri Sambhu Agarwal, Director in his statement recorded on 25.02.2010 accepted that the said goods were cleared without payment of duty. He only denied having given any specific direction to the Account s Manager for the sale of the said goods. In the present case as the duty was paid on the very next day and prior to the due date of filing the central excise return, no interest is leviable in the matter. As for the penalty payable @ one percent, the same as per law is to be calculated from the month following the month in which such duty was payable. Thus under the circumstances, as the duty itself was paid within the said month, question of imposition of penalty u/s 11A(6) would also not arise in the present matter. As for the appellants meek plea of ascertainment of clandestinely cleared quantity in the absence of stock taking, it is stated that it is a settled legal principle that admitted facts need not be proved. The order of the lower authority is upheld to the extent of confirmation and appropriation of duty amount leviable. I set aside the orders of the lower authority regarding imposition of penalties on the appellants - Appeal allowed in part.

Summary

Issues: Alleged clandestine clearance of 411 MT of Portland Cement without payment of duty and cover of Central excise invoice.

The judgment by the Appellate Tribunal CESTAT Kolkata involved the case of alleged clandestine clearance of 411 MT of Portland Cement by the main appellant, a manufacturer of "Portland Slag Cement." The officers discovered the excess production and clearance during a visit to the factory, where a private record revealed the discrepancy. The Account's Manager and Director of the firm admitted to the clandestine clearance without duty payment. The appellant paid Rs. 1,00,000/- towards the duty leviable on the cleared goods. The appellant argued that no Show Cause Notice was required as the duty was paid before the due date. The Appellate Tribunal noted the admission of the shortage by the company officials and the removal of cement without duty payment. The Tribunal upheld the duty payment but set aside the penalty imposition, citing the payment made before the due date and the absence of stock taking as per legal principles. The order of the lower authority was modified to confirm the duty amount leviable and partially allow the appeals, overturning the penalty imposition on the appellants. The judgment emphasized the importance of duty payment and the legal principles governing penalty imposition in such cases.