2004 (96) ECC 433 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(S)

Shri P.S. Bajaj, Member (J)

CCE, Chandigarh

Versus

Dabur India Ltd.

Appeal No. E/2909/04-NB(S)

[Arising out of Order-in-Appeal No. 584/CE/CHD/03 dated 10.7.2003 passed by the Commissioner of Central Excise (Appeals)]

Final Order No. A/1236/04/NB(S), dated 2.8.2004, Certified on 29.9.2004

Show Cause Notice

Wrong mention of Rule -- Mere wrong mention of the provisions of law did not vitiate the show cause notice wherein all allegations regarding the shortage of the inputs/raw material detected and admitted by the respondents, had been detailed. The show cause notice has to be read as a whole and not in a piece-meal manner.

[Para 2]

Duty demand

Show Cause Notice -- Mere wrong mention of the provisions of law did not vitiate the show cause notice wherein all allegations regarding the shortage of the inputs/raw material detected and admitted by the respondents, had been detailed. The show cause notice has to be read as a whole and not in a piece-meal manner -- The modvat credit had already been utilized by the respondents. Therefore, the amount of the credit, became recoverable from them for having wrongly utilized. For that recovery, the demand was to be confirmed and the adjudicating authority rightly confirmed the same.

[Para 2]

Penalty

Modvat Credit wrongly utilized -- Prayer of the revenue for confirmation of the penalty amount also which is Rs. 25,000 against the respondents under Rule 173-Q, cannot be sustained as the penalty could only be imposed under Rule 57(i) which pertains to the imposition of penalty in the case of wrongful availment of the credit -- Penalty set aside.

[Para 3]

PRESENT :

Shri V. Valte, SDR for the appellant.

Shri Rajesh Chibber, Adv. for the respondent.

Per : P.S. Bajaj

In this appeal, the Revenue has questioned the validity of the impugned order vide which the Commissioner(Appeals) has reversed the Order-in-Original of the adjudicating authority who confirmed the duty demand of Rs. 28,762.73 under Section 11-A and imposed penalty of Rs. 25,000.

2. The facts are not much in dispute. On carrying out physical verification of the stock of the goods lying in the factory premises of the respondents on 12.12.1997 by the Central Excise Officers, shortage of glass bottles and LDPE bags involving duty of Rs. 28,762.73 was found. On these short found goods, the respondents availed the modvat credit. They admitted the shortage and attributed the same to the clerical calculation mistake in the record. However, they debited 50% of the duty vide PLA Entry No. 370 dated 17.11.1998 and balance 50% they deposited through TR-6 challan No. 10 dated 28.9.2000. The Commissioner (Appeals) has altogether overlooked these facts. He has not referred to the admission made by the respondents regarding the shortage of the inputs and of having already partly debited the duty through PLA entry and partly by depositing through TR-6 challan. The view taken by the learned Commissioner (Appeals) that Rule 9(2) was not attracted for confirmation of the demand of duty as no shortage of the finished goods was found, in my view, is wholly erroneous. Mere wrong mention of the provisions of law did not vitiate the show cause notice wherein all allegations regarding the shortage of the inputs/raw material detected and admitted by the respondents, had been detailed. The show cause notice has to be read as a whole and not in a piece-meal manner. The modvat credit had already been utilized by the respondents. Therefore, the amount of the credit, became recoverable from them for having wrongly utilized. For that recovery, the demand was to be confirmed and the adjudicating authority rightly confirmed the same. The Commissioner (Appeals) has failed to address to all these facts and circumstances before passing the impugned order. Therefore, the impugned order passed by the Commissioner (Appeals) cannot be sustained in this regard, i.e. regarding the setting aside of duty against the respondents, especially when they had already deposited, as detailed above.

3. However, the prayer of the Revenue for confirmation of the penalty amount also which is Rs. 25,000 against the respondents under Rule 173-Q, cannot be sustained as the penalty could only be imposed under Rule 57(i) which pertains to the imposition of penalty in the case of wrongful availment of the credit. Therefore, the penalty has been rightly set aside by the Commissioner (Appeals) against the respondents.

4. Except for the penalty amount, the impugned order of the Commissioner (Appeals) is set aside and that of the adjudicating authority is restored. The amount already deposited by the respondents shall be adjusted/appropriated accordingly towards the duty. The appeal of the Revenue stands disposed of in these terms.

………………………