2014 (2) TMI 582

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.... Further appeal also relates to non-impositon of penalty on Directo under rule 26 of Central Excise Rules, 2002. The following points were taken up by Revenue: The party are engaged in the manufacture of 'ERVV Black & Galvanised Pipes & Tubes' classifiable under Chapter 73 of the first Schedule to the Central Excise Tariff Act , 1985. They are also availing CENVAT credit on the specified input and capital goods and utilizing such credit to discharge the central excise liability on the finished products manufactured and cleared by them. The officers of the Central Excise Commissionerate, Meerut II visited their factory premises on 30.9.2009 and on verification of stocks of finished goods i.e MS pipes, GI pipes and raw material i.e. MS pipes....

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....ra Skelp/Strips was detected. 3. It is further stated that shortages as referred to above accepted by Shri Harish Jugran, Director. After acceptance of shortages, he debited the central excise duty amounting to Rs.5,03,172/- (five lacs three thousand one hundred seventy two only). They also deposited 25% of the duty amount towards penalty amounting to Rs.1,25,793/- on 23.4.2010. Revenue also stated that Shri Harish Jugran, Director of M/s Vrindavan Tubes Ltd., Jindal Nagar, Ghaziabad was responsible for the conduct of the business of the company. He was responsible for transporting, removing, depositing, accounting and removal of 28.105 MY of finished goods i.e. MS pipes, GI pipes and 164.24 MT on account of raw material MS pipes, HR/MS Co....

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....lloys - 2009 (243) ELT 154 (Tri-Ahmd.), however, he finally concluded that in the absence of any ingredients of Section 11AC, penalty imposed on the appellant No.1 was not sustainable. 6. For the sake easy reference, a table giving details of finished goods/raw material, quantity shown book balance , quantity of physically verified during checking and shortage detected along with value of goods found short are indicated in the table below to appreciate the matter in its totality: Sl. No.   Description of goods   Finished goods/raw material   Qty as per book balance shown by the notice (in MT Qty physically verified in MT) Shortage detected (in MT)   Value of goods found short (in MT)   1.   MS pi....

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....s observed that in respect of MS pipes, (finished products) and MS pipes (raw material), shortage detected was to the tune of 1/3rd of the total quantity as per balance shown in the record. In respect of GI pipes, MS Pipes and HR Coil/Patra/Skelp/ strips, values were Rs.171000/-, Rs.4113813/- and Rs.1074285/- respectively. It is eivdent that substantial shortages were detected total valued at Rs.6100458/- Appellants plea that these are the normal shortages and could result out of weighment and accountal error are not having any force since shortages are very substantial. I am not able to agree with the submissions. In the normal economic business activity, taking into consideration in the economic sense, there cannot be accountal error hav....