1. Heard both sides. These two appeals are filed against the Order-in-Appeal No. 122 to 124/2013 (Ahd II/SKS/Commr(A)/Ahd dated 26.8.2013 passed by the Commissioner (Appeals), Central Excise, (Appeals), Ahmedabad III.
2. Briefly stated the facts of the case are that Revenue has intercepted a vehicle carrying copper wire of 5.38 mm thickness, weighing around 1997.1 kgs., valued at Rs. 9,38,637/- loaded in the truck bearing registration No. GJ-5T 50. On verification, it was revealed that the said goods were cleared from the appellant's factory without payment of duty of Rs. 1,16,016/-. Thereafter, on completion of investigation, show cause notice was issued to them for recovery of the duty on the said copper wire, proposing confiscation of the gods seized along with vehicle; besides, Central Excise duty of Rs. 1,02,382/- was also demanded on 1751.240 kgs. of copper wire with proposal for imposition of penalty on the appellants and personal penalty on Shri Bharatkumar Kaluram Heda, partner and Shri Kamleshbhai Yadav, owner of the vehicle under Rule 26 of Central Excise Rules, 2002. Aggrieved by the said order the appellant filed appeal before the ld. Commissioner (Appeals), who in turn, upheld the order of the adjudicating authority, except setting aside the penalty on the partner Shri Bharatkumar Kaluram Heda. Hence, the present appeals.
3. Ld. Advocate, Shri P.V. Sheth for the appellant submits that in the present appeals, the appellants are not challenging confirmation of demand of Rs. 1,16,016/- on the copper wire found in the vehicle cleared without payment of duty. However, they dispute confirmation of the demand of duty of Rs. 1,02,382/- on 1751.240 kgs. alleged to have been removed without payment of duty. It is his contention that during the course of panchnama dated 26/27.3.2012, approximately raw material of 26,880 kgs. was found against closing the stock of the raw material of 30,628.340 ks. The Revenue alleged that differential quantity between the book stock and the physical stock had been utilized in the manufacture of finished goods, which is equal to the quantity manufacture and cleared without payment of duty. He submitted that this stock of raw material was taken during the course of Panchnama on approximation basis and there was no actual weighment of the copper scrap/copper wire carried out which were lying in the factory at different places. He submits that it cannot be in any case, concluded that the shortage of raw material of 1751.240 kgs. had been used towards manufacture of the equal quantity of finished goods and cleared without payment of duty of Rs. 1,02,382/-. Referring to the statement of the partner, the ld. Advocate submitted that nowhere the partner has stated that these raw materials were used in the manufacture of finished goods cleared later clandestinely. On the contrary, he has submitted that all the raw materials purchases have been made were duly accounted for and used in the manufacture of finished goods.
4. Ld. A.R. for the Revenue reiterates the findings of the ld. Commissioner (Appeals). He has submitted that the appellant during the course of Panchnama did not raise any objection about the quantity of raw materials found short in the factory premises. Therefore, they cannot later make any claim that the quantity of raw material found short during Panchnama is incorrect.
5. I find that short issue to be determined in the present appeals is: whether the appellants had manufactured and cleared 1751.240 kgs. of finished goods without payment of duty. The appellant has not disputed the clearance of 1997.1 kgs. of copper wire without payment of duty. They dispute the clearance of 1751.240 kgs. alleged to have been manufactured and cleared without payment of duty out of the shortage in stock of raw materials found in the factory premises. The Revenue has calculated that from the excess raw material of 3748.240 kgs. after deducting the admitted quantity of 1997.1 kgs. the remaining quantity must have been used in the manufacture of equal quantity of finished goods and cleared without payment of duty. Except the said presumption by the Revenue, no other evidence has been brought on record including the statement of the partner Shri Bharatkumar Kaluram Heda. The partner Shri Heda on the other hand stated that all the raw materials purchased by them had been duly accounted for in the records, no contrary evidence has been placed by the Revenue. In the result, confirmation of duty of Rs. 1,02,382/- is unsustainable in law and accordingly, the same is set aside. Also, the penalty equal to the said duty liability is set aside. Further, I find that personal penalty of Rs. 52,380/- was imposed on Shri Kamleshbhai Yadav, the owner of the vehicle No. GJ-5-T-50 under Rule 26 of CEA, 2002. I do not fi
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nd any evidence against the said person in the impugned order establishing his involvement in clearance of the finished goods with the knowledge that the goods cleared in the vehicle was without payment of duty. The impugned order is modified to this extent of setting aside confirmation of duty of Rs. 1,02,382/- and penalty against the appellant M/s. Vinayak Industries, and the appeal is partly allowed to that extent; personal penalty imposed on Shri Kamlesh Yadav is set aside and the appeal filed by him is allowed. Appeals disposed of