Tribunal upholds penalty under Central Excise Act for shortage of MS ingots. Appellant given payment option.

The Tribunal upheld the decision to impose penalty under Section 11AC of the Central Excise Act, 1944 on the appellant for a shortage of MS ingots detected during stock verification. The appellant was granted the option to pay a penalty of 25% of the duty within 30 days from the order date.

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Issues:
Imposition of penalty under Section 11AC of the Central Excise Act, 1944 for shortage detected during stock verification.

Analysis:
The case involved a joint stock verification where a shortage of 97.725 MT of MS ingots was found, and the authorized signatory of the company admitted that the clearance of the shortage had not been recorded in statutory registers. The appellant paid an interim amount of duty, and a Show Cause Notice was issued proposing a demand of duty along with interest and penalty. The Adjudicating Authority confirmed the duty demand, imposed penalty under Section 11AC, and appropriated the deposited amount. The Commissioner (Appeals) rejected the appeal.

The consultant for the appellant argued against the imposition of penalty under Section 11AC, claiming the stock verification was not conducted properly. Various case laws were cited to support this argument. However, the Tribunal found that the authorized representative admitted to the clandestine removal of the shortage quantity, justifying the demand of duty, interest, and penalty under Section 11AC. It was noted that the lower authorities did not provide the option of a penalty of 25% of the duty as determined under Section 11AC.

Ultimately, the Tribunal upheld the impugned order but granted the appellant the option to pay a penalty of 25% of the duty within 30 days from the date of the order. The appeal was disposed of accordingly.

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