2019 (6) TMI 376

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....uring stock taking they found shortages of two raw materials i.e. 4468 Kgs of CNS17 and 2363 Kgs of DA 1100. The statement was recorded from the authorized signatory of the company, wherein he admitted the shortage. Accordingly, a SCN was issued proposing demand of duty on the short found material, penalty and proposed penalty under Rule 25, Section 11AC and confiscation of the goods under Rule 25 of the Central Excise Rules, 2002. Penalties were also imposed on Sh. Hardik prajapati and Sh. Sanjay Chandrakant Mahagaonkar. The SCN was culminated into adjudication order, wherein the adjudicating authority passed the following order. (i) "I confirm the demand of Rs. 2,76,723/- [BED = 1,87,846/- + Education Cess = Rs. 3,757/- + S&H Edu....

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....se penalty of Rs. 1,00,000/- (Rs. One Lakh only) on Sh. Hardik K. Prajapati, Authorized Signatory of the assessee under Rule 26 of the Central Excise Rules, 2002 read with rule 15 of CENVAT Credit Rules, 2004. (vii) I impose penalty of Rs. 1,00,000/- (Rs. One Lakh only) on Sh. Snjay Chandrakant Mahagaonkar, General Manager-cum-Authorized Signatory of the assessee under Rule 26 of the Central Excise Rules, 2002 read with rule 15 of CENVAT Credit Rules, 2004." 1.1 Being aggrieved by the aforesaid order in original, appellant filed appeal before Commissioner (Appeals). Ld Commissioner(Appeals) partly allowed the appeal vide order dated 11.12.2017 wherein the penalty under Rule 25(1)(a) was set aside. As regard penalty under Section....

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....1AC penalty was correctly imposed. 4. Heard both the sides and perused the records. I find from the entire facts that dispute is only on shortages found during the physical stock carried out by the preventive Officers of the Department. Neither there is any investigation regarding clandestine removal nor any charge was made, therefore, it cannot be said that there is a clandestine removal. The shortage of the goods have been admitted by the appellant, accordingly, they have paid the duty. Since there is no evidence of clandestine removal, penalty under Section 11AC cannot be imposed. The similar issue has been considered by this Tribunal in the case of Pentagon Steel Pvt. Ltd. (supra), fact of the said case is directly similar to the fac....