9911796707
TMI Blog2017 (3) TMI 1611X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007, the team of Preventive Officers of the Department inspected the Manufacturing & Trading premises of the appellant. They thoroughly searched the premises and checked the records and stock of the factory, as well as of the Trading Division & the Manufacturing Division, the discrepancies found where: - (i) Brass Scrap excess of 20.000 MT valued at about Rs. 41 lakhs. (ii) Brass Ingots excess of 23.164 MT valued at about Rs. 51,42,408/- & Zinc Ingots excess of 1.000 MT valued at Rs. 1,80,000/-. The Officers on reasonable belief that the excess stock in the Manufacturing Division of finished products as well as raw material found, was for clandestine removal with intention to evade duty and hence the goods were seized. Similarly, the inspection team kept the records as well as physical verification of the goods in the Trading Division, and found: - (i) the stock of Brass Ingot excess by 4.603 MT valued at about Rs. 4,72,589/-, (ii) Brass Scrap excess by 13.505 MT valued at Rs. 27,42,902/- & (iii) Zinc Scrap excess by 2.168 MT valued at Rs. 2,38,301/-. So far as Brass Ingot 4.603 MT excess is concerned the same was received by the assessee vide Bill of Entry No.Dt/CC/TYP464359 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 AC of the Central Excise Act, 1944. Another penalty of Rs. 2,00,000/- was imposed on Shri Aravind Agarwal - the General Power of Attorney Holder of the Manufacturing Unit & the Trading Unit under Rule 26 of Central Excise Rules, 2002. 3. Being aggrieved the appellant preferred appeal before ld. Commissioner (Appeals) who have been pleased to allow the appeal and was pleased to record the following findings:- "5 I have carefully gone through the records, grounds of appeal, the impugned order and various case laws cited by the appellants and the record of personal hearing. I am taking up the stay application as well as appeal simultaneously in the interest of speedy disposal of the appeal and written submission put forth by the appellant. I observe that is a case related to physical stock taking of finished goods as well as raw material of appellant No.1 & 2. During the physical stock taking the officers of Central excise found that excess finished goods as well as raw material than the recorded balance were lying in the business premises of appellant No.1 & 2 for clandestine removal to evade Central Excise duty. However, appellant have challenged the allegation of the revenue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich gives the details of excess quantity found at the time of verification on the spot. Further, it is practically impossible that weight of each piece of Brass Ingot & Zinc Ingot of different length and width is just equal to other goods. Naturally, it will vary from piece to piece with its size and width of each of them. Further it is not possible to arrive at the exact quantity of Brass Scrap without actual weighment as scrap is non homogenous entity which differs in size and weight from piece to piece. Thus from above it is clear that stock taking has not been done with precision. Further in the case of appellant No. 2 regarding method adopted for physical stock taking only reference has been made. In this context I would like to mention that the method of stock taking adopted by the Officers in this case at best can lead to suspicion of excess stock, but cannot be as substitute for the proof of excess. Unless the department is in a position to clearly demonstrate the fact of excess stock through physical weighment of entire stock, the allegation of excess stock cannot be sustained. In this connection I find that Hon'ble CESTAT in following cases has observed that the charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.603 MT excess in the Brass Ingots are nothing but it was a stock of non cenvatable goods. For this minor variation appellants have claimed that this variation is due to eye estimation of stock. The Adjudicating Authority did not discuss this issue in his order, thus it may be safely presumed that the Adjudicating Authority was satisfied with the explanation put forth by the appellants. Thus from above finding it is clear that Authorized Signatory of appellant No.1 & 2 had not been given opportunity to explain the stock position according to computer inventories maintained by them. On the day of search and further they have explained the exact stock position with the help of computer inventories. In this circumstances it is an accepted that so long as assessees is in position to explain how goods have been dealt with goods cannot be confiscated, in the case of Dhanraj Enterprises Versus Commissioner of Central Excise, 2006 (199) ELT 518 [CESTAT SMB], it was held that account for means giving explanation and not entering in the books of account. Thus so long as assessees explain about goods found in his possession, goods cannot be confiscated and penalty cannot be imposed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot sustainable, thus the penalty on Appellant No. 3 under Rule 26 of the Central Excise Rules, 2002, is not warranted. 6. Hence, I set aside the impugned order and allow the appeals of Appellant No. l, 2 & with consequential relief." 4. The ld. A. R. for the Revenue have reiterated the findings in the Adjudication Order and stated that it was only at the adjudication stage, after issuance of Show Cause Notice, that the respondents retracted their earlier statement and stated that the inspection team had conducted the verification by way of eye estimation. The retraction made by them in the defence reply dated 02/04/2008, after about 11 months, is nothing but an afterthought and such belated retraction have got no force. It is further stated that though Mr. Chaturvedi - Authorized Signatory stated that the stock records are maintained on the computer but he failed to retrieve the data said to be loaded in the computer. Thus, it is evident that the goods were not properly accounted for, either in the computer system or in the manual, daily stock registers. Further relied on the report received from the Assistant Collector (Preventive) which states: - "(i) the measurement of the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
