2018 (1) TMI 205 - AT - Central Excise

Clandestine removal - shortage/excess of the goods - penalties - Held that - Shri. Deepak Jain, Director of M/s Malerkotla Steels and Alloys (P) ltd and M/s P.K. Alloys Pvt. Ltd. has been expired on 25.01.2015 and death certificate to that effect is placed on record, therefore, no penalty is imposable on Late. Shri. Deepak Jain, and the appeals filed by late Shri. Deepak jain are abated. Penalty on M/s Malerkotla Steel and Alloys pvt. Ltd - Held that - Although, shortage/excess has been alleged against the appellant but no such details of shortage/excess has been enclosed or relied upon by the Revenue. In that circumstances, without any concrete evidence the demand on account of shortage/excess of ₹ 1,27,114/- and ₹ 15,21,377/- are not sustainable - penalty also set aside. Penalty on M/s P.K. Alloys Pvt. Ltd. - Held that - Considering the fact that M/s P.K. Alloys Pvt. Ltd. has paid entire amount of duty along with interest within 30 days of the order of adjudication, therefore, penalty is reduced to 25% of the duty is confirmed. Penalty on M/s Balaji Alloys - Held that - the date of clearance is not been established in the show cause notice to demand interest from the appellant, in that circumstances, the date of demand is the date of clearance goods. As the appellant has paid the duty within the one month of the order of adjudication, therefore, the demand of interest is not sustainable against the appellant - he appellant has paid 25% duty as penalty in terms of proviso of Section 11AC of the Act. Therefore, I reduce the penalty 25% of duty against M/s Balaji Alloys. Appeal allowed in part.

Summary

Issues:
- Duty demanded on shortage/excess of goods and clandestine removal of finished goods
- Penalties imposed on the appellants

Analysis:
1. The investigation revealed entries in a diary for clandestine removal of goods and shortage/excess of raw material/finished goods at the premises of certain companies. Duty was demanded on finished goods and shortage of inputs, along with penalties imposed on the appellants.

2. The appellants disputed the demands, arguing that weighment details were not provided, evidence from a deceased individual's possession was unreliable, and duty had already been reversed by buyers who took cenvat credit. They also contended that penalties on the deceased director were not sustainable due to his demise.

3. The Tribunal found that the demands on account of clandestine removal of goods were valid based on diary entries and admissions by buyers. However, the demands related to shortage/excess of goods lacked concrete evidence and were set aside, along with associated penalties.

4. For one company, demands on account of clandestine removal of goods and shortage/excess of finished goods were confirmed, with penalties reduced to 25% of the demand. In another case, duty was confirmed on clandestine removal of goods, with penalties similarly reduced.

5. The Tribunal upheld demands where evidence supported clandestine activities, reduced penalties for timely payment, and set aside demands lacking concrete evidence. All appeals were disposed of accordingly.