At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi
By, THE HONOURABLE MR. M. VEERAIYAN
By, MEMBER (TECHNICAL)
Shri S. Gautam, SDR for the Appellants.
Per M. Veeraiyan:
This is an appeal by the Department against the order of the Commissioner No. 146/CE/APPL/KNP/2008 dated 31.3.2008.
2. Heard both sides.
3. When the officers visited the factory premises on 21.12.04 and verified the stock, they found that there was shortage of 16 bags containing 1,15,200 pouches of pan masala Gutkha valued at Rs. 1,15,200/- involving duty of Rs.35,251/-. Shri Manoj Srivastava, Accountant of the firm admitted the shortage and submitted that the some stock was cleared by mistake from the factory premises by the factory staff without cover of invoices. The statement was not retracted. On the other hand, the respondent paid the duty involved on 23.12.04. The original authority, in pursuance of show cause notice issued, confirmed the demand of duty of Rs.34,560/- and also imposed penalty of Rs.35,251/- under section 11A of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002. The Commissioner (Appeals) has set aside the penalty imposed by the order of the original authority on the ground that there was no corroboration about clandestine removal of the inputs.
4. Learned DR reiterates the reasoning and findings of the original authority and the grounds of appeal.
5. I have carefully considered the submissions. This is a case of shortage of finished goods. The authorised signatory not only admitted the shortage but explained the shortages as due to removal of the same without preparing invoices and without payment of duty. After a few days the duty involved stands paid. Undisputedly, there is no retraction of the statement given by the authorised signatory. Once the fact has been admitted, the investigation officers were not expected and required to gather further evidence wasting their time and resources. In view of the above, the order of the Commissioner (Appeals) setting aside the penalty on the ground that there is no further corroboration is not justified.
6. The appeal is allowed. The order of the Commissioner (appeals) is set aside and the order of the original authority is restored. However, the respondent is permitted to pay the amount of Rs. 8812.75 being 25% of the penalty imposed, if they make the payment within
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30 days from today in the light of the decision of the Hon?ble High Court in the case of K.P. Pouches (P) Ltd. reported in [2008 (208) ELT 31 (Del)] In the event of failure to pay the amount as above, the penalty will be as imposed by the original authority.