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TMI Blog2015 (8) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... artment issued show-cause notice dated 27.3.2002 for demanding excise duty of Rs. 1,84,19,199/- for shortage of finished goods and invoked the extended period under proviso to section 11A. The Commissioner of Central Excise confirmed the demand and imposed equal amount of penalty under section 11AC along with interest under section 11AB of the Act. Hence the present appeal. 3. Heard both sides and perused the records. 4. Learned counsel appearing on behalf of the appellant submitted a written synopsis and reiterated his submissions. He submits that the department conducted verification of physical stock on 12.12.2000 on all four units of the appellant. The department issued show-cause notice dated 14.8.2001 for confiscation of the excess goods seized valued at Rs. 62,91,811/-. The Commissioner adjudicated the said show-cause notice by Order-in-Original dated 7.1.2002 and dropped the confiscation of the seized goods as the goods were still lying in the factory premises and there was no evidence that these goods were likely to be cleared clandestinely and he imposed a penalty of Rs. 10,000/- for non-maintenance of RG-I Register. He further submits that the appellants on their own c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned AR for Revenue reiterated the allegations made in the show-cause notice in para 12 page 55, para 20, page 57, para 21 page 58 and para 23 at page 61 and page 25 at page 62 where the allegations of shortage of excisable goods and also clearance of sample fabrics without payment of duty. He submits that duty is demanded under Rule 223A of Central Excise Rules, 1994. He relied on the findings at para 30 and 31. He also submits that the extended period has been rightly invoked and it is not hit by limitation. The learned AR submits that the first show-cause notice was issued for confiscation of the seized goods which was not accounted in the RG-I Register whereas the present show-cause notice was issued for demanding duty on the shortage of quantity and also demanded duty on clearance of sample fabrics. Therefore, he submits that the present show-cause notice demanding duty on the shortage of goods is not hit by limitation. After completing the investigation, the authority has rightly invoked extended period. He relied on the following case laws:- (a) Ennore Foundries Ltd. Vs. CCE - 2007 (211) ELT 434 (b) Rourkela Steel Plant Vs. CCE - 2008 (227) ELT 522 (Tri. - LB) (c) Ala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notional elongation of fabrics recorded during the relevant period. In this regard we find that the adjudicating authority has dealt the issue in detail at paras 16, 30, 31, 32 and 33 and has clearly come to the conclusion that the appellant's contention of notional elongation of 4.68% is not acceptable. The adjudicating authority has also discussed that elongation of fabrics relates to only the processed fabrics whereas the shortage of finished goods is not only the processed fabrics but also in the unprocessed fabrics as well as other made-ups. The adjudicating authority has also allowed the percentage of shrinkage of fabrics to the extent of 1 to 1.5% from the total shortage. The appellant's reliance on the elongation of fabrics is not supported with any evidence except stating their own internal high level committee report. In this regard, we find that the Hon'ble High Court of Madras in the case of Alagappa Cements Ltd. (supra) upheld the demand on shortage of stock. Para 6 of the order is reproduced below:- "6. Having heard the learned counsel for the appellant as well as the learned standing counsel for the respondents, we find force in the submission of the learned sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material is charged with coke breeze and fired in a vertical shaft kiln and the clinker is manufactured. Thereafter, the clinker is mixed with gypsum and the resultant product is called Portland cement. Therefore, when the limestone is the basic raw material which is used for the manufacture of clinker and thereafter for the manufacture of Portland cement, it was incumbent upon the appellant to have satisfactorily explained the missing quantity of clinkers to an extent of 1214.579 metric tons. It is quite apparent that large quantity of limestone quarried, as reflected by the records of the appellant, and the shortage of 1214.579 metric tons of clinkers both put together, the conclusion drawn by the inspecting officials to the effect that it resulted in clandestine manufacture of cement not brought into accounts was justified and consequently the escapement of duty in that process as assessed cannot be faulted. We fail to understand as to how the appellant is justified in contending that in the absence of positive proof as regards the actual manufacture of cement not brought into accounts, then alone the conclusion of the original authority as well as the first respondent can be j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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