2017 (10) TMI 265 - AT - Central Excise

Shortage of goods - Linear Alkyl Benzene (LAB) - Rule 20(4) of Central Excise Rules, 2002 - Held that - This short receipt has been duly certified by the Range Superintendent of the consignee in the re-warehousing certificate issued - There is no dispute of the fat that in view of Rule 20(4) of the CER, 2002, the consignor is required to discharge the duty on the short quantity of the goods. However, since the re-warehousing certificate endorsed by the concerned range officers had been filed from time to time with the Department, the demand could be sustained only for the normal period of limitation - penalty also set aside. For the limited purpose of ascertaining the quantum of duty on the short quantity for the normal period of limitation, the matter is remanded to the adjudicating authority - appeal allowed in part as regards extended period and penalty and part matter as regards demand of normal period, is on remand.

Summary

Issues:
- Appeal against order in appeal No.VAD-EXCUS-002-APP-356-2014-15 dated 21.08.2014 passed by Commissioner (Appeals) Vadodara regarding clearance of Linear Alkyl Benzene (LAB) without duty payment
- Invocation of extended period of limitation in confirming the demand
- Dispute over duty payment on short quantity of goods received at consignee's end
- Imposition of penalty under Section 11AC of Central Excise Act, 1944

Analysis:
The appeal in question was filed against an order related to the clearance of Linear Alkyl Benzene (LAB) without payment of duty against CT-3 Certificate under ARE-3 documents to the consignee. The appellant faced a demand notice for recovery of duty due to shortages found at the consignee's premises. The appellant argued that losses in transit due to the volatile nature of the product led to the shortages, and the actual quantity received was duly recorded and endorsed by the Range Superintendent. The appellant contended that the extended period of limitation should not apply, and the duty for the short quantity should be approximately 44,000/-. It was emphasized that there was no intention to evade duty, hence penalty under Section 11AC of the Central Excise Act, 1944 was deemed unwarranted.

The Revenue, represented by the Authorized Representative, supported the order of the Ld. Commissioner (Appeals). The Tribunal noted that there was no dispute regarding the shortages of LAB at the consignee's end, as certified by the Range Superintendent in the re-warehousing certificate. While acknowledging the duty liability on the short quantity as per Rule 20(4) of the Central Excise Rules, 2002, the Tribunal agreed with the appellant's argument that the demand could only be sustained for the normal period of limitation. Additionally, considering the submission that the re-warehousing certificate had been filed with the Department, the Tribunal found that penalty under Section 11AC was not justified in this case. Consequently, the matter was remanded to the adjudicating authority for determining the duty on the short quantity for the normal period of limitation, and the appeal was allowed by way of remand.

This judgment highlights the importance of proper documentation and adherence to rules in cases of duty liabilities on goods, emphasizing the need for a clear record of transactions to avoid unnecessary penalties and disputes.