TMI Blog2016 (3) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... phosphoric acid and sulphuric acid arrived at by the impugned Orders-in-Original. The demand of duty along with interest at appropriate rate for this said shortage, which is accountable for the period of only preceding one year prior to the date of show-cause notice is hereby sustained under the provisions of Section 11A(1) of Central Excise Act, 1944 read with Rule 6 of Central Excise (RGCRDMEG) Rules, 2011 and Section 11AB of the then Central Excise Act, 1944. In this regard, the appellants are directed to give all the documents if required by the original adjudicating authority and original adjudicating authority will also give the appellants sufficient opportunity by way of personal hearing to produce the data and documents, if any. This process of revision and recovery of demand has to be completed within three months of receipt of this order. - E/634 & 635/2006 - DB - Final Order No. 20294-20295/ 2016 - Dated:- 29-2-2016 - SHRI M.V.RAVINDRAN, JUDICIAL MEMBER AND SHRI ASHOK K. ARYA, TECHNICAL MEMBER For the Petitioner : Mr. Sandeep Gopalakrishnan, Advocate For the Respondent : Mr. N. Jagadish, Superintendent (AR) ORDER ASHOK K. ARYA These two appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the credit notes issued by Sterlite Industries. The alleged shortage is worked out by comparing the quantity for which payment is given and which was shown on accompanying invoice. (v) Difference is because of two main factors (a) Concentration loss (quantity difference) which has been accepted by the first appellate authority. (b) notional weighment difference due to calibration error in the weighing scales of the parties. (vi) The dispute here in these appeals pertains to duty demanded on notional weighment difference alone. 2.1 The appellants further submit as follows: (a) Alleged shortage is not actual shortage but it is a notional shortage because of weighment difference. (b) The admitted fact that goods received at FACT were verified for the seal to be intact clearly established that quantity sent from the company had been duly received by FACT without any pilferage or embezzlement. (c) The commercial agreement entered into between the parties are only an internal arrangement between the parties for determination and settlement of the price of the goods dispatched and therefore no reliance can be placed on the same to allege short receipt of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supplying company having not received any extra consideration for supply of impugned goods, the money received by them have to be treated as the price for the quantity received i.e., transaction value, therefore there is no question of demanding differential duty based on any notional value. (j) Appellant was under bona fide belief that the receipt of goods with the seal intact had to be acknowledged in full and was accordingly given in D3 declaration and other documents. They being a public sector undertaking there is absolutely no scope for them to indulge in duty evasion. The extended period of limitation cannot therefore be invoked against them. (k) Department except for narrating that the declarations and other documents reflected the quantity dispatched did not bring out any conscious or deliberate intention on their part and in view of large number of rulings on this point, Section 11A(1) cannot be invoked against them. (l) The first appellate authority gave a finding that appellant has no intention to evade duty. Consequently, the appellate authority set aside the penalty under Section 11AC of Central Excise Act. The expression used in both Sections 11AC an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the net weight of each consignment and based on this settled their bill with SIIL on a weekly basis. On receipt of subject inputs, appellants viz., FACT regularly filed D-3 intimations, monthly, quarterly returns with the jurisdictional Central Excise Range Officers. The appellants also maintained required registers under Rule 194(1) of erstwhile Central Excise Rules, 1944 in RG-16 and subsequently under Rule 5 of Central Excise (Removal of Goods at Concessional Rate of Duty for the Manufacture of Excisable Goods) Rules, 2001. In none of these records appellants have recorded any shortage of the subject inputs. The appellants argument that there was difference because of weighbridge errors is not acceptable as they have not shown any such weighment differences in Central Excise records. iii. Regarding shortage due to concentration (quality), appellants argue that this is not a physical shortage but a commercial shortage. Since tankers carrying subject inputs on arrival at FACT are inspected to ensure that sealing is not tampered and only on such certification, tankers are allowed for unloading, there is no scope for change in the concentration and commercial shortage. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1944 and further imposed penalty of ₹ 4 lakhs under Rule 25 of Central Excise Rules, 2002. Against this Order-in-Original, M/s. FACT filed appeal before Commissioner (A), who vide his Order-in-Appeal No.249/2006 dated 29.3.2006 held that the appellants were liable to pay duty on 351.062 MTs. of Phosphoric Acid and 208.406 MTs. of Sulphuric Acid saying that the same was not utilized for specified industrial purpose of manufacture of fertilizer and the interest was also held as payable by M/s. FACT. Here the Commissioner (A) set aside the penalties imposed under Section 11AC of Central Excise Act and Rule 25 of Central Excise Rules, 2002 by the Order-in-Original dated 21.2.2005. 5. In both these cases, it is found that the Revenue issued show-cause notices invoking the Proviso to Section 11A(1) of Central Excise Act as existed then. In other words, the allegation was that the duty was not paid by M/s. FACT by reason of suppression of facts and in contravention of the Rules with intent to evade payment of duty as the show-cause notice No. 115/2004 dated 15.9.2004 and 19/2003 dated 21.1.2004 clearly indicate so (which were issued along with Annexures and for imposing penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settlement of the price of the goods despatched and no reliance could be placed on the same for alleged short receipt of the goods, is not an acceptable argument and does not have any force; no prudent person would agree that a commercial enterprise is required to have two sets of records, one for submission to Revenue/Central Excise authorities and another for their commercial transactions, where the quantities shown are different for one set of the transaction, and the argument of the enterprise that these sets of records are for different purposes and should be accepted as such cannot be legally justified on any count. The appellants argument that Central Excise Department cannot rely on their commercial transaction documents, which they used for making payments to their suppliers, does not have any force as the said documents cannot be ignored by anyone and more so by an official of Revenue Department. 6.2 Thus, it is on record that the appellants did not show actual receipt of the subject inputs in Central Excise records and registers but maintained separate accounts which were different from the entries put in Central Excise records and registers. Appellants have argued r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 15.9.2004 (appeal No.634/2006) and 21.1.2004 (appeal No.635/2006). When the ingredients of willful misstatement or suppression of facts with intent to evade payment of duty were not found available by the Commissioner (A), in both the cases, he set aside the penalties under Section 11AC, which otherwise is mandatory penalty, whenever there is a case of willful misstatement or suppression of facts with intent to evade payment of duty. 7.1.1 It is not clear that how the Commissioner (A) has sustained the demand for the entire period which is beyond one year, when the penalty under Section 11AC of Central Excise Act has been set aside. Here CESTAT Delhi s decision in the case of M/s. Smart Finance vs. Commissioner of Central Excise, Jaipur: 2014-TIOL-1555-CESTAT-DEL is relevant though this decision is on service tax, the provisions in respect of service tax in the Finance Act, are similar to the provisions given in the Central Excise Act, 1944. In case of Service Tax, wherever there are mala fides involved i.e., wherever there is deliberate evasion of duty by the act of willful misstatement or suppression of facts with intent to evade payment of service tax there is mandatory pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees. 7.3 The appellants have quoted the decisions of Hon ble Supreme Court in the case of UP State Cement Corporation Ltd. vs. Union (supra), and in the case of National Organic Chemicals Indus Ltd. vs. CC (Import) (supra). We find that the items involved in these decisions are cement clinker and raw naphtha, whereas here items are sulphuric acid and phosphoric acid. We find that for the difference in quantity on account of concentration variation, already Commissioner (Appeals) has given the relief to the appellants in both appeal cases. The appellants cannot have any substance and support for further relief citing above two decisions, where the present facts do not match with the facts of the said two cases. 7.4 From the discussions above and the findings given by Commissioner (A) in his impugned orders No.165/2006 dated 10.3.2006 and No.249/2006 dated 29.3.2006 willful misstatement or suppression of facts with intent to evade payment of duty is not established on the part of the appellants. The special facts of the case that a Government of India Enterprise - a Public Sector Undertaking (and its employees) are part of the proceedings and that willful misstatement of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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