Tridev Ispat Pvt. Ltd. Vs Commissioner of Central Goods (CESTAT Delhi)
CESTAT Delhi held that imposition of penalty under section 11AC(1)(a) of the Central Excise Act, 1944 mandatory on account of shortage detected during the course of search. Accordingly, penalty upheld.
Facts- M/s. Tridev Ispat Pvt. Ltd. is engaged in manufacture of M.S. Ingots, for which, Sponge Iron, Pig Iron, and scrap are the raw materials. During the search conducted at the factory premises of the appellant, shortage of 197.115 MT. M.S. Ingots (finished goods), 154.56 MT of Sponge Iron and 11.04 MT of Pig Iron (raw material) was detected, against which the appellant deposited central excise duty of Rs.13,15,617/- vide their Cenvat account. During investigation, it was also found that the appellant had removed their finished goods clandestinely as revealed from the scrutiny of loose papers, indicating unaccounted despatches by the appellant. The central excise duty payable on such clandestine removal was worked out to Rs.71,45,014/-.
Show cause notice dated 31.03.2014 was issued to the appellant and five other noticees demanding central excise duty on two counts i.e. 13,15,617/- for shortage detected in the raw material and finished goods u/s. 11A(4) of the Act along with interest for late payment and penalty and Rs.71,45,014/- on account of clandestine removal of goods. On adjudication, the demand was confirmed. Being aggrieved, the appellant filed the appeal before the Commissioner (Appeals), which has been rejected by the impugned order. Hence, the appellant has approached this Tribunal.
