ORDER
S.S. Kang, Vice-President
1. The appellant filed this appeal against the impugned order and challenging the imposition of penalty under Section 11AC of Central Excise Act. The brief facts of the case are that the appellants are engaged in the manufacture of zinc concentrate and they were also exporting the same without payment of duty. The appellant cleared two consignments of zinc concentrate for export of 9525 DMT and 6100 DMT. At the time of export, the custom authorities found certain quantities of zinc concentrate short in one consignment, it was 45,230 DMT and in the other consignment there was 52,340 DMT which was duly mentioned on ARE-I under which the goods were cleared for export. The Revenue is of the view that the goods which were not exported are liable for duty and these were cleared without payment of duty from the factory and were not exported. The appellants are not contesting the demand of duty. The duty was paid along with interest. The contention of the appellant is that as there is no allegation of diversion of the goods by the appellant nor any mens rea on their part to export less quantity of goods. The contention is that in one consignment shortage is 4% and in other consignment shortage is 8% which was due to transportation losses as the zinc concentrate was transported from the factory to the port in the open trucks. The contention is that the goods were transported from Udaipur to Kandla port in the truck and therefore certain quantity of concentrate was found short at the time to export which is due to transportation losses. The contention is that after pointing out by the custom authorities the shortage of the concentrate the matter was taken up with transporter and appropriate amounts were deducting from the amount due to the transporters. The contention is that as per the provisions of Section 11A of the Act the penalty is imposable in case duty of excise has not been levied or paid has been short paid by reason of fraud, collusion or any wilful statement or suppression of facts or contravention of any provisions of the Act or rules. The contention is that there is no allegation, suppression, fraud or collusion against the appellant for exporting the goods, therefore, the penalty is not imposable.
2. The contention of the Revenue is that the appellant become aware of the shortage of goods when the ARE-I under which the goods were cleared for export were endorsed by the custom authorities regarding shortage of goods received at the port and appellant had not informed the Revenue regarding this shortage, therefore, the appellants are liable for penalty.
3. In this case, the appellant made export of zinc concentrate under ARE-I the quantity of goods zinc concentrate is 9525.29 DMT and 6132.750 DMT as per the shipping bill the custom authorities found that certain quantities were found short than the quantity mentioned in ARE-I. In one consignment shortage was 45.220 DMT in the other shipment shortage was 52.340 DMT which comes to 4% and 8%. The appellant paid duty on 3rd May 2003. Subsequently, interest was also paid. There is no allegation that, the goods were diverted by the appellant. The zinc concentrate was transported from Udaipur to Kandla in open trucks, therefore, I find merit in the contention of the appellant that this nominal shortage of 4% and 8% was due to transportation losses, therefore, it cannot be held that duty was short paid or not paid due to fraud, collusion or suppression, therefore, the imposition of penalty is not sustainable hence set aside. The appeal is allowed as indicated above.
(Dictated & pronounced in open Court)