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TMI Blog2013 (11) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the appellant firm. In course of stock taking, the following shortages in respect of various items of finished goods were noticed :- (i) shortage of copper wire rods weighing 9400 kgs. vis-`-vis the balance in the RG-1 register ; (ii) copper strips shortage of 4100 kgs. vis-`-vis the balance in the RG-1 register ; (iii) copper scrap shortage of 948 kgs. vis-`-vis the balance in the RG-1 register. The total duty involved on the finished goods/scrap found short was Rs. 7,50,229/-. Shri Anurag Jain, in whose presence the stock taking had been done, accepted the shortage. His statement was also recorded on the spot on the same day i.e. 11/8/08, wherein he accepted the shortage detected in course of stock taking which had been done in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed. Beside this, the Additional Commissioner also imposed the penalty of Rs. 2,00,000/- on Shri Anurag Jain under Rule 26. Both the appellant firm as well as partner Shri Anurag Jain filed appeals to Commissioner (Appeals) challenging the order of imposition of penalty on them under Section 11AC/Rule 26. The Commissioner (Appeals) by the impugned order dated 1/11/10 upheld the penalty under Section 11AC on the appellant firms and penalty under Rule 26 on Shri Anurag Jain. Against this order of the Commissioner (Appeals), these two appeals have been filed. 2. Heard both the sides. 3. Shri V.K. Gupta, Advocate, the learned Counsel for the appellant, pleaded that the goods found short are those which had been accounted for in the RG-1 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estine removal is not sustainable, for clearance of goods without issuance of invoice, only the penalty under Rule 25 would be imposable which can be less than the amount of duty demand. He also pleaded that there was no intention to evade the duty as that that time the sufficient balance in the RG-23A Pt. II register. With regard to penalty on Shri Anurag Jain, he stated that in view of Commissioner (Appeals)s finding that there was no clandestine removal, there is no question of Shri Anurag Jain having dealt with the goods which he knew or had reason to believe, are liable for confiscation and, therefore, penalty on Shri Anurag Jain under Rule 26 is not sustainable. 4. Shri A.K. Jain, the learned Jt. CDR, defended the impugned order by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Cross Objection, has been filed by the Department, in view of the facts of the case and evidence on record, penalty under Section 11AC has been correctly upheld. With regard to penalty on Shri Anurag Jain, it was pleaded that since by his own statements admitting removal of goods without payment of duty and without issue of invoices, he was involved with the sale of excisable goods cleared without payment of duty and without issue of invoice, he has dealt with the excisable goods which he knew were liable for confiscation and hence penalty has been correctly imposed on him. He, therefore, pleaded that there is no infirmity in the impugned order. 5. I have considered the submissions from both the sides and perused the records. 6. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are fallacious. Just because any goods whose production has been recorded in the RG-1 register and subsequently those goods were not found in the factory and there is no satisfactory explanation for such shortage, it has to be concluded that the goods found short and whose shortage has not been explained satisfactorily, have been cleared clandestinely without payment of duty. In this regard just because the production of those goods had been entered in the RG-1 register, it cannot be the defence of the appellant that there was no intention on his part to evade the duty. Similarly, the appellant having sufficient balance in the RG-23A register, cannot be the ground for concluding that there was no intention to evade the payment of duty. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that since in this case the entire duty demand on goods found short had been paid before the issue of show cause notice and no option to pay reduced penalty under proviso to Section 11AC has been given, the judgment of Hon'ble Delhi High court in the case of K.P. Pouches (P) Ltd. vs. Union of India reported in 2008 (228) E.L.T. 31 (Del.) would become applicable and the appellant company cannot be denied the benefit of reduced penalty. Since in this case, it is not disputed that the duty on the goods found short has been paid even before the issue of show cause notice, and no option to pay reduced penalty under proviso to Section 11AC had been given in the adjudication order, in my view, the plea of learned Counsel of the appellant regard ..... X X X X Extracts X X X X X X X X Extracts X X X X
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