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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 ..... of cross-examination. 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 scheme. Hence the demand of duty on the shortage of raw materials used in the manufacture of final product, against which demand of duty raised, is not justified. 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 Rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery 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 imposed penalty on the other noticees. The Tribunal by final order No. A/1575 to 1576/WZB/06-C-III (EB) dated 24.7.2006, set-aside the adjudication order and remanded the matter to the adjudicating authority to pass an order after observing the principles of natural justice. In de-novo adjudication, the adjudicating authority confirmed the demand of Central Excise duty amounting to ₹ 14,04,884/- alongwith interest and imposed penalty of equal amount of duty on the assessee. It has also appropriated the amount of ₹ 75,000/- as deposited by the assessee. It has also confiscated the land and building, plant and machinery etc. and imposed redemption fine of Rs. Two lakh. It has also imposed penalties of ₹ 1,50,000/- and ₹ 50,000/- on Shri N.K. Surana, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 Excise Indore vs. Power Electrical Electronics - 2013 (293) E.L.T. 305 (Tri. Del.) (c) Commissioner of Central Excise, Lucknow vs. Sigma Castings Limited - 2012 (282) E.L.T. 414 (Tri.-Del.) (d) Commissioner of Central Excise Lucknow vs.. Roll Tubes Limited - 2011 (265) E.L.T. 414 (Tri. Del.) (e) Alladi Drilling Equipment Pvt. Limited vs. Commissioner of Central Excise, Hyderabad - 2011 (263) E.L.T. 438 (Tri. Del.) (f) Fact Paper Mills Limited vs. Commissioner of Central Excise, Bhavnagar - 2014 (314) ELT 449 (Ahmd.) - 5. On the other hand, the learned Authorised Representative for the Revenue reiterates the findings of the Commissioner (Appeals). He submits that Shri L.P. Choraria, Authorised Signatory in his statement dated 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 have removed the finished goods illicitly without preparing the Central Excise invoices and without payment of Central Excise duty. Regarding the shortage of raw materials, it is submitted that they have removed the finished goods illicitly without following the Central Excise procedure. As against the Central Excise duty of ₹ 4,44,068/-, on the shortage of various raw materials, they debited duty amounting to ₹ 75,000/- vide Entry No. 855 dated 15.11.1997 from RG-23A Part-II and stated that balance amount would be debited in 2 or 3 days. He also admitted that the figures shown in Daily Progress Report Register were entered by their factory staff and fully agreed with the figures to be true and correct. 8. Shri N.K. Surana, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 scheme. Hence the demand of duty on the shortage of raw materials used in the manufacture of final product, against which demand of duty raised, is not justified. 11. Regarding the demand of duty on the shortage of finished goods, the Commissioner (Appeals) observed as under:- 22. However, the appellants have raised a relevant point that though some physical shortages were noticed as per recorded balances on 14.11.1997, the appellants had not reduced the RG-1 recorded balance by the alleged shortage and had carried forward the recorded balance subsequently. It is also true that when the stock taking was done in their factory, subsequently, on 26.04.1998 by the department officers no discrepancy was noticed between the physic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 taken into account the quantity available in factory and used in the manufacture of finished goods. In the present case, the assessee had not taken a stand in their various statements during investigation that the shortage of the materials were available in the factory. (c) In the case of Sigma Castings Limited (supra), the assessee s Authorised Representative has nowhere accepted that such shortage of finished goods are on account of clandestine removal. In the present case, the assessees Authorised Representative accepted clandestine removal of the finished goods. (d) In the case of Roll Tubes Limited (supra), the stock verification done wrongly as the pipes segregated into three categories of Light, Medium an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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