ORDER
V.K. Jain, Member (T)
1. This appeal arises out of the Order No. 226/Kol-II/2003 dated 27.11.2003 passed by the Commissioner (Appeal-II), Central Excise, Kolkata, vide which the Commissioner has rejected the appeal filed by the appellant company holding that the Order of the lower authority is correct in law. Hence this appeal. The lower authority has confirmed the Central Excise Duty amounting to Rs. 4,10,315.00 (Rupees four lakh ten thousand three hundred and fifteen) under Rule 57-I(1)(iii) of the erstwhile Central Excise Rules, 1944 read with Section 11A(2) of the Central Excise Act, 1944, and imposed a penalty of equivalent amount under Rule 173Q(1) read with Rule 571(4) of the said Rules. He has also ordered to pay interest under Rule 571(5) of the above Rules, 1944. The issue in brief is that during physical stock verification of the appellant’s factory on 2.9.98 along with one authorised representative of the appellant company, a shortage of 12,859 pieces of round/bar and rods were noticed. Those were MOD VAT inputs and alleged to have been cleared as such, without payment of duty on which Credit was taken.
2. Heard Shri K.K. Banerjee, learned Advocate on the appeal. He reiterates the submissions as given in the Appeal Memorandum. He submits that the Commissioner (Appeals) has passed a scriptory order. He also submits that the Central Government had done the stock taking of the factory on 19.5.98, and they found the stock correct. After about 3-1/2 months, the Anti-Evasion, Headquarters again visited the factory and conducted the stock-verfication on 2.9.98 and they found that there was a total shortage of 12859 pieces. He, therefore, submits that the impugned Order may be set aside and consequential benefit be given to the appellant company.
3. Heard Shri A. Raha, learned S.D.R. for the Revenue. He submits that the Commissioner (Appeals) has observed in the impugned Order as follows:
…I am not convinced by the appellant’s defence that out of 12859 pcs of modvat inputs found, 12,855 pcs. were defective and lying in the manufacturing section for rectification. If that were the case there is no reason why the appellant would not mention this simple fact in the Joint Stock Verification Report. Besides, the appellant could not produce any evidence in support of their claim….
He also submits that the Commissioner (Appeals) has passed his Order after proper application of mind. He again submits that the statement of Shri Munna Lal Prasad, the authorised representative of the appellant company had deposed under Section 14 of Central Excise Act, 1944, to the effect that he had accepted the particulars mentioned in the said stock-taking report of 2.9.98. He also stated that the difference of 12859 pcs. found short during the physical counting was due to mishandling of account pertaining to the input, by their dealing assistant. He submits that the appellant company did not Dispute the difference of 12859 pieces of input on the date of actual stock-taking jointly conducted by the Departmental Officer and the authorised representative of the assessee He again submits that the stock-taking conducted on 19.5.98 has no connection with the stock-taking conducted on 2.9.98, i.e. after three and a half months, since these were two independent stock-takings, and the appellant company has admitted that there was a shortage which was not explained by them.
4. I have heard both sides. I find that this is an admitted fact that the shortage has been accepted by the authorised representative deposed under Section 14 of the Central Excise Act, 1944 and that the shortage was attributed to mis-handling of account pertianing to the input, by their dealing assistant. I agree with the finding of the Commissioner (Appeals) that out of 12859 pieces of MODVAT inputs found short, the appellants could not explain the shortage. The appellant company had taken the plea that out of 12859 pieces of MODVAT inputs found short, 12855 pieces were defective and lying in the manufacturing section for rectification. Had this fact been pointed out the same could have been verified at the time of stock-taking then and there. Taking this plea at a later stage does not help the appellant company. If that were the case, there was no reason why the appellant company would not mention the simple fact in the Joint Verification Report. Since the appellant company has already admitted the shortage, I do not find any infirmity in the Order passed by the Commissioner (Appeals). Accordingly. I reject the appeal filed by the appellant company.