2007 (11) TMI 209

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....detected shortage of inputs involving Central Excise duty of Rs.2,39,713/- which was voluntarily debited by the appellant No. 1 vide PLA entry No. 29 dated 19.2.2003. On scrutiny of the records it transpires that the appellant No. 1 removed inputs for processing which need not returned back within 180 days as required under Rule 4(5)(a) of Cenvat Credit Rules, 2002.  The appellant debited the credit amount in RG-23A Pt.II Entry No. 2145 dated 18.2.2003.  Shri Rajiv Sinha appellant No. 2 Senior Manager (Finance) of the appellant No. 1 admitted the shortage of the inputs.  The adjudicating authority confirmed the demand of duty and appropriated the amount has already been deposited.  He also imposed penalty of equal amount....

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....Jay International -2007 (213) ELT 709 (Tri-Del) 4. The learned authorized representative (DR) reiterates the finding of the Commissioner (Appeals).  He submits that the appellant failed to explain the reasons for shortage and therefore the charge of clandestine removal is appropriate. 5. After hearing both the sides and on perusal of the record, it is seen that the appellant in the statement dated 18.2.2003 admitted the shortage of inputs and also debited the duty voluntarily.  The learned Advocate drew the attention of the bench in the panchnama dated 18.2.2003.  It is revealed from the panchnama that as a result of physical verification of the inputs PVC compound and cyclone examine were found short.  On being as....

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....y, I find force in the submission of the learned Advocate.  It is seen from the record that the shortage of inputs was detected during the stock verification.  The appellant debited the duty immediately upon detection.  The appellant also explained on the spot that they are not conducted the stock taking for a long time and therefore such shortage may be detected.  The Tribunal in the case of Pee Jay International (supra) held that clandestine removal of inputs from factory was not proved and therefore, imposition of penalty under Section 11AC is not warranted.  Further, the Hon'ble Punjab & Haryana High Court in the case of Sigma Steel Tubes (supra) held that penalty under Section 11AC of Central Excise Act, 1944 i....