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2023 (12) TMI 1058 - AT - Central ExciseLevy of Central Excise Duty - resin powder reflected in the monthly returns of Allied Resins - resin powder clandestinely cleared - under valuation of stock transferred goods - penalty under Section 11AC of the Central Excise Act, 1944 - penalty under rule 26 Of Central Excise Rules, 2002 read with Section 9(1) of the Central Excise Act, 1944. Confirmation of duty demand of Rs.61,24,002/- including Education Cess and SHE Cess, relating to unaccounted manufacture and clearance of U F Resin Powder, to Rampur Unit of Allied Resins - HELD THAT - There is no evidence to substantiate the allegation of clandestine clearance and there is no question of the Appellant being required to pay any duty in respect of the said quantity. Thus, we hold that the demand of duty from the Appellant on the said quantity again is not sustainable. Accordingly, the demand confirmed in the impugned order on this count is liable to be set aside. Confirmation of duty demand of Rs.22,99,672/- including Education Cess and SHE Cess, relating to clandestinely cleared goods not accounted for in physical stock verification - HELD THAT - On going through the reconciliation statement submitted by the Appellant, the net shortage of 36.13 MT arrived at by the Appellant is satisfied. Accordingly, the Appellant is liable to pay duty of Rs. 3,02,176/- along with interest on the shortage of 36.13 MT, as worked out by them. Confirmation of duty demand of Rs. 1,50,540/- relating to under valuation of stock transferred goods - HELD THAT - The Appellant has not disputed this liability. Accordingly, the confirmation of this demand is upheld. Levy of penalty of Rs.85,74,214/- on the Appellant under Section 11AC, of the Central Excise Act, 1944 - HELD THAT - The duty of Rs. 3,02,176/- along with interest has been confirmed on the shortage of 36.13 MT, which the Appellant agrees to pay. It is observed that this shortage has been arrived at by taking the yield of UF Resin Powder produced as 55% of the weight of liquid resin consumed. As there is no evidence available on record to establish clandestine clearance of this quantity of U F Resin Powder, penalty under Section 11AC not imposable on this demand. Also, the demand of duty Rs. 1,50,540/- is related to under valuation of stock transferred goods. The Appellant has not disputed this liability. However, the issue being technical in nature, the intention to evade payment of duty cannot be attributed to this demand. Accordingly, no penalty imposable on this demand. Levy of penalty of Rs.1,00,000/- on Shri. R K Vijay, CEO under rule 26 Of Central Excise Rules, 2002 read with Section 9(1) of the Central Excise Act, 1944 - HELD THAT - The allegation of suppression with intent to evade payment of duty has not been substantiated in this case. Also, the department has not brought in any evidence to highlight the role of Appellant No.2 in the commission of the alleged offence. Accordingly, the penalty imposed on him under rule 26 read with section 9(1) of the Central excise act, is not sustainable. Appeal disposed off.
Issues Involved:
1. Demand of Rs. 61,24,002/- for resin powder allegedly manufactured by the Appellant. 2. Demand of Rs. 22,32,691/- for alleged clandestine clearance of resin powder. 3. Demand of Rs. 1,50,540/- for under-valuation of stock transferred goods. 4. Imposition of penalty on the Appellant and Appellant No. 2. Summary: Issue No. (i): Demand of Rs. 61,24,002/- The Appellant contended that the Commissioner erred in confirming the duty demand of Rs. 61,24,002/- for resin powder manufactured by Allied Resins using the Appellant's facilities, as Allied Resins had already paid the duty on this quantity. The Tribunal observed that there was no evidence to substantiate the allegation of clandestine clearance and held that the demand of duty from the Appellant on this quantity is not sustainable. Consequently, the demand was set aside. Issue No. (ii): Demand of Rs. 22,32,691/- The Tribunal noted that the allegation of clandestine removal of 349023 kg of resin powder was based solely on the statements of A. K. Bhora and Asim Kumar Das, without any corroborative evidence. The Appellant argued that the resin powder yield was 45% of the liquid resin consumed, but even if it was 55%, the variation was minor. The Tribunal accepted the Appellant's reconciliation statement showing a net shortage of 36.13 MT and held the Appellant liable to pay duty of Rs. 3,02,176/- along with interest for this shortage. Issue No. (iii): Demand of Rs. 1,50,540/- The Appellant did not dispute the liability for the confirmed demand of Rs. 1,50,540/- relating to under-valuation of stock transferred goods. The Tribunal upheld this demand. Penalties: The Tribunal observed that there was no evidence to establish clandestine clearance of the resin powder or the role of Appellant No. 2 in any alleged offense. Therefore, the penalties imposed on both Appellant 1 and Appellant 2 were set aside. Conclusion: 1. The demand of Rs. 61,24,002/- was set aside. 2. The demand of Rs. 22,32,691/- was reduced to Rs. 3,02,176/- for the shortage of 36.13 MT, payable with interest. 3. The demand of Rs. 1,50,540/- was upheld. 4. Penalties imposed on Appellant 1 and Appellant 2 were set aside. The impugned order was modified accordingly, and the appeals were disposed of on these terms.
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