TMI Blog2023 (5) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... stributors was not even doubted. It is only on the ground that the goods were not actually sold by the distributors to the physicians, which was the ground on which it was contended that the case was not covered under Section 4(1)(a). The Commissioner in present case has held that In fact, the genuineness of the price at which the physician samples were sold by the assessee to the distributors was not even doubted. It is only on the ground that the goods were not actually sold by the distributors to the physicians, which was the ground on which it was contended that the case was not covered under Section 4(1)(a) - further they held that In the instant case, discrepancies between the accounts (RG1) and the audited accounts have been noticed in respect of closing stocks. Since it is inherent from the very nature of estimation of stocks in steel factories that there will be variations between what is reflected in the RG1 and what is actually found, no malafide can be attributed in the discrepancies or inaccuracies found between the two figures which are based on estimates. In the absence of any mala fide, confiscation of goods found in excess stock and imposition of penalty is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f finished/semi-finished goods shown in their statement when compared with the adjusted RG-1 opening balance of stock of finished/semi-finished goods for the years 2001-02, 2002-2003 and 2003-2004. Accordingly, 3 show-cause notices dated 4.4.2003; 19.03.2004 and 7.04.2005 were issued demanding duty on the differential value of the stock as per Annexures to the respective show cause notices. In the impugned order, the Commissioner has confirmed the demands for the respective periods taking into account the differences in stock and accordingly demanded the differential duty. 2. Learned advocate Shri M. S. Nagaraja appeared for the appellant and Mrs. D. S. Sangeetha, Additional Commissioner (AR) appeared for the Revenue. 3. Heard both sides and perused the records. 4. The contentions of the appellants as put forth by the learned advocate are summarized as below: 4.1 The appellants are Public Sector Undertaking engaged in the manufacture and clearance of Iron and Steel Products falling under Chapter 72, 73, 84, etc., of the First Schedule to the Central Excise Tariff Act, 1985. They carry out Annual Stock Verification of the goods as on 31st March every year for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C Circular No.52/79 CS 6 dated 16.10.1979 laying down guidelines for condonation of losses and also with regard to the different practices followed in the Steel Plants for accounting production, clearance, stock taking, etc., and to consider the explanation offered by the plants while examining excess/deficit of the goods during stock taking. 4.6 He further submitted that CESTAT in their own case as reported in 2006 (200) ELT 229 (Tri.-Bang.) has set aside the demand. They also relied upon the following judgments. i. SAIL, Rourkela Steel Plant vs. CCE, Bhubaneshwar: 2001 (137) ELT 566 (Tri.-Kol.) ii. Rashtriya Ispat Nigam Ltd. vs. CCE, Visakhapatnam 4.7 He further submitted that the department having accepted the principles laid down in the judgment of the Tribunal in appellant s own case on the same facts and issue for the period from March 1988 to March 2001, the initiation of proceedings and demand of duty for the subsequent periods from 31.3.2002 onwards on identical facts and issue is against the settled law. i. Birla Corporation Ltd. vs. CCE: 2005 (186) ELT 266 (SC) ii. Jayaswals Neco Ltd. vs. CCD: 2006 (195) ELT 142 (SC) iii. CCE vs. Bigen Industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the audited books of returns of the appellant. First of all, the basis for demanding duty appears to be beyond the framework of the show-cause notices. The parameters relied upon by the authorities in the show-cause notice and the parameters relied upon by the learned Commissioner are at variance, which is legally not sustainable. 6.1 Further the show-cause notices though demanded duty beyond the normal period fail to invoke proviso to Section 11A but the learned Commissioner in his impugned order invoked proviso to Section 11A and imposed penalty under Section 11AC which is beyond the scope of show-cause notices. In this regard, the Hon ble Supreme Court in case of CCE, Surat vs. Sun Pharmaceuticals Indus. Ltd.: 2015 (326) E.L.T. 3 (S.C.) has held as follows: 6. As already noted above, the only ground which was mentioned in the Show Cause Notice was that since the goods had not been sold, the provisions of Section 4(1)(a) of the Act could not be applied. We find that in the show cause notice, the Department has, thus, accepted that no monetary consideration or any other consideration had been received by the assessee or the distributors from a doctor or concerned to who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the fact such contraventions/violations have been repeated year after year and I hold accordingly. Since the duty demand has been confirmed under the proviso to Section 11A(1) of the Central Excise Act, 1944, penalty is imposable under Section 11AC read with Rule 25 of the Central Excise Rules, 2002. Emphasis applied In spite of these observations, he proceeds to impose invoke proviso to section 11A and impose penalty under Section 11AC which is legally not sustainable. 6.3 Further, the appellant s in their own case reported in 2006 (200) ELT 229 (Tri.-Bang.), the Tribunal has held that the discrepancy between the RG1 stock and the physical stock are based on the estimated production and not on actual weighment. Comparison between two estimations is inherently inaccurate. Because of these shortages, if any, is inflated due to errors in taking opening balance and physical stock. Considering the practical difficulties in estimating the actual stock and in view of the submissions made by the appellant, the Tribunal had set aside the impugned order. 6.4 In the case of Rourkela Steel Plant (SAIL) vs. CCE, Bhubaneswar: 2001 (137) ELT 566 (Tri.-Kolkata), the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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