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PJ/Case Laws/2012-13/1515

Whether duty is payable on shortage of M.S. ingots and risers and runners alleged on estimated basis?

Case:-SHREE NIRMALAND STEEL CASTING PVT. LTD. V/S COMMR. OF C.EX RAIPUR
                                                          
Citation:- 2013 (288) E.L.T. 103 (Tri.-Del.)

Brief Facts:- The facts of this case in brief are that the appellant was manufacturer of M.S. ingots and risers and runners. Their factory was visited by the central excise officers. The stock of ingots was determined by actual weightment of one ingot from each variety and on the basis, the total weightment of M.S. ingots was determined and when compared with the balance as per the register, shortage of 29.005 MT involving duty of Rs. 94836/- was detected. The officer also determined the stock of runners and risers and in respect of the same, there was shortage of 34.139 MT involving duty of Rs. 1,11,429/-. The duty on the shortage of M.S. ingots was paid which is Rs.94,836/- by the appellant. Appellant refused to pay duty on runners and risers and thereafter filed an appeal.

Appellant’s Contention:- Appellant contention was that so far as the M.S. ingots, the duty stand confirmed on the basis of shortage detected and so far as the shortage of runners and risers are concerned , there was no actual shortage as mentioned in the  impugned order itself. The quantity of the runners and risers had been determined purely by estimation which had been made by their employee; that in any case since the runners and risers were being captively used by re-melting for the manufacture of M.S. ingots, the same were eligible for full duty exemption under notification No. 67/95-C.E. and as such, there was no duty liability in respect of the same.

Respondent’s Contention:- Respondent contention was that the weight of the both the items M.S. ingots as well runners had been determined by actual weighment, that the storage in respect of both the item is 63.194 MT which is huge and in respect of M.S. ingots the appellant admitted the shortage and already paid the duty and hence there is no reason for non payment of duty in respect of the shortage of runners and risers.  

Reasoning of judgement:- The impugned order-in appeal itself mentions that the quantity of the runners and risers was estimated by appellant employee and it is only with regard to the weight estimated by him, that shortage of the 34.139 M.T. was determined. Moreover, it has also been pleaded by the appellant that the runners and risers were captively consumed and as such, there was no duty liability, as the same would be exempt from duty under Notification No. 67/95-C.E. Therefore, Tribunal was of the view that there is merit in the plea to set aside the demand on the said count along with setting aside of penalty.

Decision:- Appeal allowed.

Comment:-  The essence of the case is that when there is no evidence on record indicating  clandestine activity of the appellant, demand cannot be confirmed on the assessee. It is well settled principle that such allegation is required to be proved by positive and sufficient evidence. 

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