2023 (4) TMI 320 - AT - Central Excise

Confiscation of the excess stock, with redemption fine and penalty - serious discrepancy in the so called stock taking the appellant have requested for cross-examination of panchas - gross violation of principles of natural justice - HELD THAT - As per the investigating officer excess stock of 32.15 MT was alleged as against the total stock recorded in RG-1 register of 625.710MT. The appellant have vehemently objected on this difference in the stock merely on the ground that no physical stock taking was conducted and methodology of the stock taking was not disclosed. The Learned Counsel, is agreed upon that the adjudicating authority was supposed to give the details of methodology in stock taking and also allowed the cross-examination of panchas. In this fact, the matter needs to be remanded to the adjudication authority for reconsideration after allowing the cross examination of panchas. It is settled law that once the penalty is imposed on the partnership firm it s partner cannot be imposed penalty separately. This issue has been considered and settled by the Hon ble Gujarat High Court in the case COMMISSIONER OF CENTRAL EXCISE VERSUS JAI PRAKASH MOTWANI 2009 (1) TMI 501 - GUJARAT HIGH COURT . No penalty is imposable on Shri. Amit Gupta - Appeal is allowed by way of remand to adjudicating authority.

Summary

Issues:
1. Excess stock found during verification
2. Confiscation, redemption fine, and penalties imposed
3. Lack of physical stock verification and methodology disclosed
4. Cross-examination of panchas not allowed
5. Penalty imposed on partner of the firm
6. Remand to adjudicating authority

Analysis:

1. The case involved the discovery of excess stock of 32.15 MT of MS ingots during a factory visit, leading to a show cause notice for confiscation, redemption fine, and penalties.

2. The Adjudicating Authority's order confiscated the excess stock, imposed fines, and penalties, which were partially reduced by the Commissioner (Appeals), prompting the appellants to file the present appeals.

3. The appellant's counsel argued that the difference in stock was determined without physical verification, and the methodology was not specified, highlighting a violation of natural justice due to the lack of cross-examination of panchas.

4. The Revenue representative supported the impugned order, leading to a detailed consideration by the Hon'ble Member (Judicial), who found discrepancies in the stock-taking process.

5. The Hon'ble Member agreed with the appellant's counsel that details of the stock-taking methodology should have been provided, and cross-examination of panchas should have been allowed, leading to a decision to remand the matter to the adjudicating authority for reconsideration.

6. Additionally, the judgment cited settled law that once a penalty is imposed on a partnership firm, a separate penalty cannot be imposed on its partner, referencing a precedent from the Hon'ble Gujarat High Court.

7. Consequently, the judgment allowed the appeal of the firm for remand and allowed the appeal of the partner of the firm, with a clear directive for the adjudicating authority to reconsider the matter in light of the issues raised.

This detailed analysis of the judgment provides a comprehensive overview of the issues raised, arguments presented, and the ultimate decision rendered by the Appellate Tribunal CESTAT AHMEDABAD.