2010 (11) TMI 282

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.... the department against the very same order seeking enhancement of penalty from Rs. 60,000 to Rs. 2,49,847/-. 2. None appears for M/s. S.K. Sacks Pvt. Ltd. However, there is a communication dated 19-11-10 seeking decision of the appeal on merits and on the basis of case laws mentioned in the grounds of appeal. 3. The relevant facts, in brief, are as follows : (a)     There was a visit by the officers on 10-5-01 and they noticed shortage of 40,187 Kgs. of inputs namely, plastic granules on which credit has been taken. The party accepted the shortage of inputs and paid the credit involved amounting to Rs. 3,34,356/- voluntarily. There is a separate set of proceedings relating to the said shortage of inputs noticed....

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.... but reduced the penalty to Rs. 60,000/-. (g)     The party is in appeal challenging upholding of the demand of duty and imposition of penalty of Rs. 60,000/-. The department is in appeal seeking enhancement of penalty to Rs. 2,49,847/-. 4. In the grounds of appeal, the party submits that duty is payable only on removal of goods under Rule 4 of Central Excise Rules, 2002 and that Commissioner (Appeals) erred in holding that the demand of duty on account of shortage made by the adjudicating authority is justified. It was also contended that the Commissioner (Appeals) erred in sustaining penalty of Rs. 60,000/-. The party has relied on the decision of the Tribunal in the case of Neutral Glass and Allied Industri....

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....ty of Rs. 1,50,000/- was paid on 4-11-01 towards duty liability on finished goods found short. Without further investigation, a cryptic, show cause notice has been issued of course, invoking the provisions of Section 11AC as well. The party has chosen to pay a further amount of Rs. 1 lakh on 5-6-03. In other words, before the adjudication by the original authority, entire amount of duty involved on short found finished goods stands paid. I do not find any justification whatsoever to link the shortage of finished goods found on 3-11-01 with the shortage of inputs found on 10-5-01. Shortage of inputs can explain excess of finished goods. Shortage of inputs cannot explain shortage of finished goods. Having said that, I notice that there is no ....