2009 (10) TMI 791

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....sition of penalty of Rs. 25,000/- under Rule 26 of Central Excise Rules, 2002. 2. The facts of the case are that the Preventive Officers of the Central Excise visited the factory premises of the appellants on 11-3-2004. During the physical verification of the stocks of finished goods as well as inputs under the panchanama, it was noticed that there was shortage in the stock of main input i.e. M.S. Ingots and the stock as per the input register maintained for accounting of M.S. Ingots were not tallied with the quantity of the inputs as well as the finished goods were found short which involves the availment of Cenvat Credit on the inputs and evasion of Central Excise duty on the finished goods. Show cause notice was issued to the appellants....

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....the penalty amount not recoverable from the legal representatives of accused, imposition of penalty is intended to penalize the accused, therefore recovery of penalty from the legal representatives would amount to punishing the legal representatives - hence penalty cannot be recovered from the legal representative. On the issue of clandestine removal, she submits that the appellants are the manufacturer of different sizes of ingots which differs in weight and shortage was determined by the department based on surmises and just eye estimation. The actual weighment by the department and physical verification were not prepared. She further submits that the allegation of the department is not supported by any strong and positive evidence like e....

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....arned SDR submits that the appellants plea that actual weighment was not made and that shortage of goods was based on assumptions, the appellants never questioned the correctness of panchnama nor requested for re-checking/re-verification till the show cause notice was issued. The appellants failed to bring on record a copy of panchanama and the shortage was admitted by the appellants. To support this contention he placed reliance on Systems and Components Pvt. Ltd. - 2004 (165) E.L.T. 136 (S.C.) wherein it was held that "admitted facts need not be proved". He further submits that in the case of clandestine removal, documentary evidence cannot be physically available because of the clearance by the appellants in the clandestine/secret manner....

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....g authority has rightly denied the credit. To support this contention he placed reliance on the following judgments :- (a)     Spectra Electronics Pvt. Ltd. - 2009 (235) E.L.T. 795 (HP) (b)     Karamchand Appliances Pvt Ltd. - 2009 (238) E.L.T. 706 (HP) (c)     S.K. Foils Ltd. - 2009 (239) E.L.T. 395 (P & H) 8. He further submits that the penalty on the Director of the Company was rightly imposed and to support this contention he relied on I.P.I Steel v. CCB - 2003 (151) E.L.T. 97 and prayed that the duty demand, interest and penalty were rightly imposed on the appellants and the impugned order be upheld. 9. Heard both sides and perused the records. 10. On careful examination....