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TMI Blog2015 (5) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 4,44,068/-. The said officers, during the search of factory premises recovered a Daily Progress Report Register containing the details of production shown therein, different from the production recorded in the RG-1 register. A statement dated 15.11.1997 of Shri L.P. Choraria, Authorised Signatory of the assessee was recorded. Further, statements dated 05.01.1998 and 18.12.1998 of Shri N.K. Surana, Director were also recorded. 2. Show cause notice dated 18.01.1999 was issued proposing demand of duty on the shortage of finished goods and raw materials as well as differential duty on the basis of Daily Progress Report Register and RG-1, alongwith interest and to impose penalty of equal amount of duty. It has also proposed confiscation of land, building, plant and machinery under Rule 173(Q) of the erstwhile Central Excise Rules, 1944. It has proposed to impose penalty on Shri N.K. Surana, Director, Shri L.P. Choraria, Authorised Signatory of the assessee. The adjudicating authority confirmed the demand of duty alongwith interest and imposed penalty of equal amount of duty on the assessee and also imposed redemption fine in lieu of confiscation of plant and machinery. It has also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, as there is no detail of stock taking mentioned in the Panchnama. In any event, the shortage of raw materials can not be sustained as it was used in the manufacturing finished goods, against which demand was confirmed by the adjudicating authority and Commissioner (Appeals) set-aside. Learned Advocate submits that the Commissioner (Appeals) has rightly set-aside the demand of duty on the alleged shortage of finished goods as the Central Excise officers during the subsequent visit on 24.6.1998 had not found any discrepancy in stock. It was submitted that the alleged shortage of finished goods as on 14.11.1997 was not deducted from the RG-1 balance, which was found during stock verification on 24.6.1998. It is further submitted that investigation was conducted on 14.11.1997 and the show cause notice was issued on 18.01.1999, which was barred by limitation, as held by the Hon'ble Supreme Court in the case of CCE, Mangalore vs. Pals Microsystems Limited 2011 (270) ELT 305 (SC). 4. He also relied upon the various decisions as under:- (a) Sisco Industries Limited vs. Commissioner of Central Excise, Allahabad - 2013 (297) E.L.T. 457 (Tri.-Del.) (b) Commissioner of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It may possible that the assessee had manufactured the goods and kept in their stock. It is also contended that the demand of duty on the basis of Daily Progress Report Register is corroborated with the statement of the Authorised Signatory and the Director of the assessee, who admitted the clearances of the goods on the basis of Daily Progress Report Register and therefore, there is no need of cross-examination of the writer of the said record. It is submitted that demand was raised, not merely on the basis of stock verification records but it was raised after thorough investigation during the material period and on the basis of various statements recorded therein and extended period of limitation would be invokable. 7. After hearing both the sides and on perusal of the records, I find that the Central Excise officers during the visit of the appellant s factory on 14.11.1997 detected the shortage of raw materials and finished goods and duly prepared Panchnama. Shri L.P. Choraria, Authorised Signatory of the assessee in his statement dated 15.11.1997 admitted the shortage of the finished goods as well as raw materials as mentioned in the Panchnama and fully admitted that they hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner (Appeals) had examined this issue. It is observed that the final products manufactured by the appellant are different varieties of PVC compounds. The main raw material for this is PVC resin. No shortage of PVC resin was found on 14.11.1997. The shortages noticed were in respect of other raw materials which are added to PVC resins to produce different varieties of PVC compounds. Hence these shortages could not have been used in manufacture the finished goods (PVC compounds) found short. It is further observed that these raw materials found short were clandestinely removed from their factory without payment of duty. 10. I am unable to agree with the finding of the Commissioner (Appeals). I find that Shri N.K. Surana in his statement admitted the shortage of the raw materials. It is noted that shortage of raw material for various resins. There is no material available on record that the raw materials were clandestinely removed. The appellant contended that the shortage of raw material was consumed in the finished goods, removed clandestinely and the demand of duty was confirmed. There is no requirement of one-to-one co-relation of input and finished goods in the CENVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. I find that the Director and the Authorised Signatory of the assessee had admitted the authenticity of the register in various statements. They have not disowned this register at any point of time, before filing of the reply to show cause notice. It is already observed stated that retraction of statement in reply to the show cause notice is not corroborated with any evidence and therefore, it can not be accepted in the eye of law. Hence I agree with the findings of the lower authorities in respect of demand of duty in the Daily Progress Report Register. 13. The case laws relied upon by the learned Advocate are discussed below:- (a) In the case of Sisco Industries Limited (supra), the Tribunal held that there should be circumstantial evidence and precision in the enquiry demonstrating real criteria adopted while determining shortage. It should not be concluded on mere surmises or assumption or presumption. In the present case, there was enquiry by the Central Excise officers by recording statements and therefore, the said case law will not be applicable here. (b) In the case of Power Electrical & Electronics (supra), the assessee is alleging that Revenue officers had not take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f penalty on the Director of the assessee is not proper. Having considered the peculiar facts and circumstances of the case, I find that it is not a fit case for confiscation of plant and machinery and raw materials, and imposition of redemption fine is not warranted. 15. In view of the above discussion, the impugned order is modified in so far as demand of duty of Rs. 4,44,066.00, alongwith interest and penalty on the shortage of raw materials is set-aside and the demand of duty on finished goods of Rs. 3,62,346.00 and Rs. 5,98,470.00 alongwith interest and penalty under Section 11AC of the Central Excise Act, 1944 are upheld. As the adjudicating authority has not allowed option to pay penalty 25% of duty within the specified period, the option is given to the assessee to pay penalty 25% of duty, subject to the entire duty as determined, alongwith interest and penalty of 25% of duty are paid within 30days from the communication of this order. The penalty imposed on the Director of the assessee and redemption fine are set-aside. The appeals filed by the assessee and the Revenue are disposed of in above terms. The appeal filed by Shri N.K. Surana, Director is allowed. (Order prono ..... X X X X Extracts X X X X X X X X Extracts X X X X
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