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TMI Blog2016 (1) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 - - - Dated:- 10-12-2015 - MR. M.JAICHANDREN AND MRS. S.VIMALA, JJ For the Petitioner : Mr. C. Natarajan for Mr. N. Inbarajan For the Respondent : Mr. Rajnish Pathiyil JUDGMENT M. Jaichandren, J The above appeals had been filed against the final order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, made in Final Order No.1261 and 1262 of 2006, dated 11.12.2006, under Section 35-G of the Central Excise Act, 1944. 2. The facts in brief are as follows: 2.1) The appellant is a company registered under the Companies Act, 1956. It is engaged, inter alia, in the manufacture of Iron and Aluminium Castings, which are foundry products. It is also holding Central Excise Registration Certificate. 2.2) As per the statutory requirements and standards of Accountancy, annual stock taking is done of all castings, whether finished or cast and in the process (work-in-progress), for the purpose of ascertaining the handling shortages or the excesses, during the operations of the year. The corrected stocks, as per the actuals, are carried forward in the books and financial statements for the preparation of the final accounts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explained adequately. The use of the word shortages is an internal usage to denote the difference between the theoretical and actual production. It had also been stated that no finished goods had been removed from the factory premises without the payment of excise duty. As such, there was no scope for the demand of duty on the alleged shortages and therefore, a request had been made to the department to drop the proceedings. 2.5) The Commissioner of Central Excise had passed an Order-in-Original, dated 29.7.1999, imposing an amount of ₹ 45,26,680/-, in respect of the goods found short, under the proviso to Section 11A(1) of the Central Excise Act, 1944, after adjusting the excess castings found in the shortage notices. A penalty of ₹ 8,80,756/- had been imposed on the appellant, under Section 11AC of the Act, for the period of demand, after 28.9.1996, and a penalty of ₹ 1 lakh had been imposed on the appellant, for the period prior to 28.9.1996. 2.6) An appeal had been filed by the appellant before the Central Excise and Service Tax Appellate Tribunal, against the Order-in-Original No.4/99, under Section 35B of the Central Excise Act, 1944, in Appeal No.E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serious error in reversing the order of the learned Commissioner of Central Excise in so far as the learned Commissioner of Central Excise itself had noticed that the excess found by the assessee during annual stock-taking had been corrected and taken into account and hence no short levy can be presumed? 3. Mr. C. Natarajan, the learned Senior Counsel appearing on behalf of the appellant had submitted that the order of the Tribunal is vitiated on the principles laid down by the Supreme Court, in paragraphs 25 and 33 of its decision, in Omar Salay Mohamed Sait Vs. Commissioner of Income Tax, Madras), AIR 1959 SC 1238. He had further submitted that, based on the principles enshrined in Paragraphs 11 and 12 of the decision of the Supreme Court, in Ishwar Dass Jain (dead) through Lrs., Vs. Sohan Lal (Dead) by L.R.s), the order passed by the Tribunal ought to be interfered with. 4. It had been further submitted that the matter adjudicated by the Commissioner of Central Excise, in the Order-in-Original, dated 29.7.1999, was to the effect that there were shortages of Iron and Aluminium castings, as noted from the stock taking done, as per the internal audit of the appellant compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory requirements. If the Tribunal had considered such data arrived by the appellant, the Tribunal ought to have arrived at a different conclusion, favourable to the appellant. 8. It had been further submitted that the Tribunal had misread the case of the appellant, as if the appellant had pleaded and failed to establish that the discrepancy was due to clerical errors. The Tribunal had neglected to note that the Commissioner of Central Excise, vide his adjudication, has stated in Paragraph-19, that, in the show cause notice, there was no allegation of clandestine removal of the goods. Thus, without any evidence of removal of the goods, the Tribunal could not have upheld the duty demand, as it is clear that there should have been actual or constructive removal for sustaining the demand. 9. The learned counsel had further submitted that the Tribunal had neglected to consider Section 11AC, with regard to the penalty imposed on the appellant. No finding has been recorded as to whether the matter had called for the imposition of penalty on the appellant, under Section 11AC of the Act. There is only a peremptory conclusion stating that the appeal of the assessee is devoid of merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. Therefore, the present appeals, filed by the appellant, are devoid of merits and therefore, they are liable to be dismissed. 11. In view of the submissions made by the learned counsels appearing on behalf of the appellant, as well as the respondent, we are of the considered view that the Tribunal had arrived at its conclusions, without properly appreciating the evidence available on record relating to the shortages and excesses found in the records of the appellant, including the internal audit. The actual audit practice of the appellant had not been considered by the appellant. The explanation submitted by the appellant, with regard to the manufacturing process and the stock taking procedure had not been appreciated by the Tribunal in its proper perspective, as there are no clear findings on the said issue. Further, there is no finding by the Tribunal, with regard to the removal of the goods, from the premises of the appellant, for the imposition of the excise duty, as per the provisions of the Act. The conclusion arrived at by the Tribunal, relying on the statements made by the officers of the appellant company, cannot be sustained. The Tribunal had concluded that there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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