10 June 2024


Customs, Excise and Service Tax Appellate Tribunal

D.K. Shrivastva and Ors. vs. C.C.E. and S.T., Daman




Assessee is duty bound to record stock of finished goods

In facts of present case, the officers have visited the factory of the appellant and carried out the physical stock taking wherein, they found the excess stock of 34.16 M.T of M.S. Ingot. A panchnama proceeding was carried out and the excess found goods were seized. The panchnama proceeding was carried out in the presence of Authorized Signatory. Subsequently a Show Cause Notice was issued proposing confiscation of the excess stock and consequential penalty upon the appellant factory as well as co-Appellant D K Shrivastava.

The adjudicating authority while adjudicating the show cause notice confiscated the excess found stock and imposed redemption fine of Rs.2 Lacs and penalty of Rs.35,000 on the appellant factory and penalty of Rs.50,000 was also imposed on the Authorized Signatory D K Shrivastava. Being aggrieved by this Order-In-Original, both the Appellants have filed appeal before the learned Commissioner (Appeals). The learned Commissioner (Appeals) has upheld the confiscation, redemption fine but reduced the penalties on both the appellants therefore, the present appeals filed by the Appellants.

The excess stock found during the physical stock taking for which a panchnama was drawn in the presence of authorised signatory. There is no dispute about the excess stock found. However, no mala fide intention can be attributed to the appellant but in terms of Rule 10 of Central Excise Rules, 2002, it is the bounden duty of the assessee to record stock of finished goods. In the present case, it is admitted fact that the excess stock was not accounted for by the Appellant therefore, the goods are liable for confiscation. However, since there is no attempt to clear the goods clandestinely and the offence at the most is only of non accounting of finished goods, present Tribunal is of the view that the lenient view can be taken.

Accordingly, the redemption fine of Rs.2 Lacs is reduced to Rs.1 Lacs. However, the penalty imposed on the appellant factory i.e. Rs.10,000 is reasonable hence the same is upheld. There is no mala fide intention or there is no attempt to clear the excess stock clandestinely, the co-appellant cannot be imposed with any penalty accordingly, the penalty imposed on D K Shrivastava is set aside. Appeal partly allowed.

Tags : Excess stock Penalty Legality

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