TMI Blog2014 (3) TMI 202X X X X Extracts X X X X X X X X Extracts X X X X ..... The respondent while accepting the fact of these shortage have not given any explanation for the same other than stating that the same may be due to improper stock keeping. In my view, the explanation given by the respondent for these shortages is not satisfactory and therefore the same are to be treated as due to clandestine removal of cenvated inputs and accordingly penalty under Rule 15 (2) of Cenvat Credit Rules, 2004, readwith Section 11AC of the Act would be attracted. Levy of penalty u/s 11AC confirmed - penalty under Section 11AC would be 25% of the duty demand if the same is deposited by them within a period of 30 days from the date of receipt of this order. - Decided in favor of revenue. - Appeal No. 966 of 2008 (SM) - Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at credit involved on the goods found short - Rs. 2,00,344/- was paid by the respondent within a period of three months. Subsequently, after issue of show cause notice, the Jurisdictional Assistant Commissioner vide order-in-original dated 23/8/06 confirmed the above-mentioned demand alongwith interest but did not impose any penalty on the respondent on the ground that the Cenvat credit involved had been paid before the issue of show cause notice. On appeal being filed by the Revenue to Commissioner (Appeals) for imposition of penalty on the respondent, Commissioner (Appeals) vide order-in-appeal dated 23/2/07 the same was dismissed. The Commissioner (Appeals) in his order had observed that there is no evidence to show that the Cenvat credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved on the goods cleared clandestinely had been paid before the issue of show cause notice. He, therefore, pleaded that the impugned order is not correct. 4. Shri Ashish Kumar Shukla, Advocate, the learned Counsel for the respondent, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that merely on account of shortage in the account of Cenvat credit availed inputs, it cannot be concluded that those inputs had been cleared clandestinely without payment of an amount equal to the Cenvat credit availed, that the Tribunal in the case of Vikram Cement (P) Ltd. vs. CCE, Kanpur reported in 2012 (286) E.L.T. 615 (Tri. - Del.) has held that clandestine removal cannot be presumed merely because th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The duty liability on the respondent in respect of cenvated input found short is also not disputed. The only point of dispute is as to whether shortage of the cenvated input is to be treated as clandestine removal so as to warrant the imposition of penalty under rule 15 (2) of Cenvat Credit rules, readwith Section 11AC or it should simply be treated as shortage due to unspecified reasons not warranting imposition of penalty under Section 11AC. The Tribunal in the case of Vikram Cement (P) Ltd. vs. CCE, Kanpur (supra), CCE, Kanpur vs. Ambica Polytubes (supra) and Hon ble Punjab Haryana High Court in the case of Commissioner vs. H.S. Steels (P) Ltd. (supra) has held that merely on the basis of shortage of finished goods or cenvated raw ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock keeping. In my view, the explanation given by the respondent for these shortages is not satisfactory and therefore the same are to be treated as due to clandestine removal of cenvated inputs and accordingly penalty under Rule 15 (2) of Cenvat Credit Rules, 2004, readwith Section 11AC of the Act would be attracted. In view of this, I hold that the impugned order waiving the imposition of penalty on the respondent under Section 11AC is not correct and the same has to be set aside. However, since the entire duty alongwith interest had been paid before the issue of show cause notice and no option to pay lower penalty under proviso to Section 11AC has been given in the order-in-original, in accordance with the judgment of Hon ble Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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