1990 (8) TMI 155 - HC - Central Excise

High Court affirms duty recovery & penalty on public limited company for stock register discrepancies

MARATHWADA ALLOY STEEL COMPANY LTD. Versus COLLECTOR OF C. EX.

The High Court upheld the duty recovery and penalty imposed by the Collector and appellate authority on a public limited company for discrepancies in its ... Accountal of goods - Shortage Issues:1. Discrepancies in stock register leading to duty evasion2. Confiscation of steel ingots and imposition of penalty3. Appeal against the order of adjudication4. Challenge under Article 226 of the ConstitutionAnalysis:1. The petitioners, a public limited company manufacturing steel, were found with a glaring disparity in their stock register during a Central Excise inspection. The investigation revealed unaccounted production of steel ingots over a specific period. The Collector directed confiscation of seized steel ingots and imposed penalties for breaching Central Excise Rules. The petitioners challenged this order, leading to an appeal where the Central Board of Excise and Customs partially allowed relief, reducing the penalty and directing duty recovery on the remaining quantity.2. The Collector's order of confiscation and penalty imposition was based on the discrepancies found in the stock register and the unaccounted production of steel ingots. The appellate authority upheld the duty demand but reduced the penalty. The petitioners contested the duty evasion findings, questioning the basis for calculating the duty payable. The Collector's reliance on evidence from the inspection and production records was deemed appropriate, and the petitioners' defense was dismissed.3. In the appeal, the petitioners argued against the duty calculation methodology adopted by the appellate authority. They claimed that variations between actual stock and register entries should absolve them of duty liability. However, the authorities found the Collector's comparative analysis of production records to be conclusive, rejecting the petitioners' reliance on additional registers produced belatedly. The courts upheld the duty demand and dismissed the petitioners' contentions.4. The High Court, after a detailed examination of the evidence and arguments presented, concluded that the orders of the Collector and the appellate authority were legally sound. The petition challenging the duty demand and penalty imposition was dismissed, affirming the duty liability on the petitioners. The rule was discharged with costs, upholding the duty recovery and penalty imposed by the Collector and the appellate authority.