JUDGMENT
Archana Wadhwa
1. Vide the impugned Orders the authorities below have confirmed the demand of duty of Rs. 1,00,358.00 (Rupees one lakh three hundred fifty-eight) and Rs. 1,430.00 (Rupees one thousand four hundred thirty) and has also imposed a personal penalty of Rs. 10,000.00 (Rupees ten thousand). Briefly stated the facts of the case are as follows:-
1.1. The appellants’ factory was visited by the Central Excise Officers, Anti-Evasion Unit, on 31.10.95. Physical Verification of the stock of raw materials as also of finished goods, was undertaken along with the representative of the Company. As a result of such stock-taking, shortages of raw materials were detected from the recorded balance in RG-23A Part-I and a shortage of Aluminium Waste and Scrap was found when compared to the Closing Balance of RG-I Register. The statement of Shri A.K. Shukla, the authorised representative of the Company, was recorded wherein he admitted shortages of the raw materials and the finished products, and deposed that he was not in a position to clarify the reasons of such shortages immediately.
1.2. On the above facts, a show cause notice was issued to the appellants proposing demand of duty and imposition of personal penalty. During adjudication proceedings before the Assistant Commissioner, the appellants in their reply dated 13.5.96 took a stand that the raw materials in question was lying in the floor or fitted in the machines of the machines shop having been taken there by the labourers early in the morning of 31.10.95. Inasmuch as the said raw materials were not taken into account by the Visiting Officers, there were no actual shortages. The said contention of the appellants was not accepted by the adjudicating authority who confirmed the demand of duty and imposed personal penalty, vide his impugned Order. Appeal against the same also failed before the Commissioner (Appeals). Hence the present appeal.
2. I have heard Shri V.K. Chaturvedi, learned S.D.R. for the Revenue and Shri S.K. Roychowdhury, learned Advocate for the appellant company.
3. Admittedly, at the time of visit of the Officers on 31.10.95, raw materials in respect of which the appellants had taken the MODVAT Credit, were found short than the recorded balance in RG-23A Part-I. Physical stock-taking was undertaken jointly by the Officers along with the authorised representative of the Company. No objection was ever raised by the authorised representative of the Company at the time of physical verification. In his statement given on 31.10.95 in response to summons issued to him, Shri A.K. Shukla admitted the shortages and failed to give any reasons for the same. It is only at the time of filing reply to show cause notice, the appellant firm has taken a stand that the raw materials were lying in the floor of the machine shop. The said plea of the appellant firm, in my view, has been rightly rejected by the original adjudicating authority, when he observed – “It is needless to reiterate that whenever stock is to be physically verified at any given point of time, all receipts/issues till that time has to be adjusted and closing balance struck in order to ascertain the quantity lying in stock.” The appellants even after the Stock Verification Report or after recording of the statement of Shri Shukla, did not represent this fact to the Excise Authorities that the stock verification was not correct. It is only after a gap of more than six months at the time of the reply, they had come up with the above plea without any supporting evidence to that effect. The same has been rightly rejected as an after-thought by the original adjudicating authority who has also referred to the various contradictory pleas raised by the appellants in their reply to the notice. When the appellants have availed the MODVAT Credit in respect of the inputs, it is the duty of the assessee to account for the said inputs properly. When admittedly modvatable inputs had been found short by the Visiting Officers, the inevitable conclusion which flows from the said shortages, is that they had been used in a manner other than that for which they were brought into the factory. The onus to prove otherwise shifts to the assessee, which in the instant case has not been discharged by them. Accordingly, I confirm the demand of duty of Rs. 1,00,358.00 (Rupees one lakh three hundred fifty-eight) in respect of the short-found inputs.
3.1. As regards the confirmation of demand of duty of Rs. 1,430.00 (Rupees one thousand four hundred thirty) in respect of the short-found waste and scrap, the appellants have a taken a general stand that the same was entered in their RG-I record on assumption basis, whereas the clearance was on actual weight basis. The above plea of the appellants does not fully explain the shortages. Accordingly, I confirm the said demand. Imposition of personal penalty of Rs. 10,000.00 (Rupees ten thousand) only is not on the higher side. The same is also accordingly confirmed. In a nutshell, the appeal is rejected.
(Pronounced in the Court)