Met Trade India Ltd. vs Commissioner of Central Excise

@DELETEUPPERDATA

Satish Chandra. J.

The present appeal is filed by the appellant under Section 35-G of the Central Excise Act, 1944, against the impugned order, dated 1-6-2004 passed in Appeal No. 418-422 of 2004; Misc. Order No. 181 of 2005, dated 8-7-2005 2005 (189) E.L.T. 36 (Tri. - Del.)], by Customs, Excise and Service Tax Appellate Tribunal, New Delhi. On 7-7-2009 a coordinate Bench has admitted the appeal on the following substantial question of law:

"Whether while disposing of the application (ROM) moved by the appellant the mistake pointed out in the application (ROM) was found debatable and requires reappreciation of entire facts on records but the same was rejected on the ground that the Tribunal had no jurisdiction as the scope of the ROM is too limited. The order of the learned Tribunal, dated 8-7-2005 is prima facie erroneous in law?"

The brief facts of the case are that the appellant-assessee was engaged in the manufacturing of Lead Alloys, Pure Lead and unwrought lead and are availing MODVAT credit on the inputs that are utilized in the manufacture of the same. The raw material is lead scrap in the form of lead ingots and re-melted lead ingots which are off grade material.

On 6-9-1999, a team of Central Excise Officers had made a surprise visit to the factory of M/s. Gupta Pigments & Chemicals Ltd. (in short GPCL) and checked physical stock of finished goods and inputs, whereupon an excess stock of 105.740 metric tonnes of lead ingots (finished product). The team also visited the premises of the appellant on the same day and found excess stock of 15.020 metric tonnes of lead ingots (finished) vis-�-vis the recorded balance in RG-1 register as also shortages of 274.629 of lead ingots (input) and 100 kgs. of white lead (input) were noticed vis-�-vis the respective stock balances recorded in RG 23A Part 1 register. The stock verification was done in the presence of General Manager, Production Manager and independence witnesses, who have also signed the Panchnama. The assessee has given an explanation that the excess stock was borrowed from M/s. Met Trade India Ltd. (MTIL., for short) i.e. appellant. So, they levied the duty and also imposed various penalty, which were confirmed by the First Appellate Authority. However, the Tribunal has given the partial relief. Not being satisfied the assessee moved a rectification application, which was rejected by the Tribunal. Being aggrieved, the assessee has filed the present appeal.

With this background Shri Anil Sharma, the learned counsel for the assessee-appellant submits that there is apparent mistake from the record, so the impugned order needs rectification. According to the learned counsel the plant and machinery of the appellant is fully automatic which manufactured ingots with uniform weight of 20 kgs. However, the weight of 278.274 metric tonnes of ingots seized from GPCL varied from 18.70 kgs. to 19 kgs. each and which were in the nature of raw material only. The factory was running in three shifts. There was no malafide intention on the part of the appellant so it could not be penalized. The Tribunal has committed some errors apparent on the face of the impugned order. For the purpose, the appellant preferred a Rectification of Mistake Application (ROM), which was dismissed by the Tribunal. The learned counsel also submits that while dismissing the said ROM application the Tribunal observed that the issue is debatable and requires reappreciation.

The learned counsel further submitted that the learned Additional Commissioner had entered into a wrong finding with respect to the stock of 278.274 metric tonnes, inasmuch as he has stated that the same was identical to the product being manufactured by the appellant even though it was on record that the plant and machinery of the appellant is fully automatic which manufactured ingots with uniform weight of 20 kgs. The variance in weight was due to the fact that the plant and machinery at GPCL are manually operated. This fact was completely overlooked by the learned Additional Commissioner. Further, in appeal too, the learned Commissioner (Appeals) failed to give any finding to this specific ground raised by the appellant. The Tribunal has also overlooked this aspect, so there is apparent mistake on the record. Lastly, he made a request that the impugned order of the Tribunal needs to be rectified accordingly.

On the other hand, Shri B.K. Singh Raghuvanshi, the learned counsel for the Department-respondent submitted that the order cannot be reopened on merit. Moreover, it is a finding of fact. He submits that the factory was running in three shifts and huge raw material has been consumed. 15.020 metric tonnes of lead ingots, in finished condition, found in excess in the factory and it would also support the view that MTIL were manufacturing lead ingots without accounting in RG-1. These ingots were also found to be identical to the MTIL marked ingots found in GPCL''s factory. M/s. MTIL have not succeeded in rebutting these evidences gathered against them by the Department. Lastly, he justified the impugned order passed by the Tribunal.

Having heard both the parties at length and on a perusal of the material available on record, it appears that the excess stock were found during the course of raid/surprise visit by the Department Officers. No satisfactory explanation was given. The Tribunal held that appellant had manufactured and clandestinely removed 278.274 metric tonnes of MTIL marked lead ingots to GPCL without payment of duty. So, the demand of duty on the goods was sustained. The goods were removed in contravention of Rules 9(1), 52A, 53,173G and 173F with obvious intent to evade the payment of duty, both Sections 11AB (for interest on duty) and Section 11AC (for penalty) stood attracted. So, the MTIL are liable to pay the duty with interest chargeable under Section 11AB and 11AC.

Further, the Tribunal observed that MTIL marked ingots 278.274 metric tonnes were not manufactured by GPCL, but raw material produced by them. The appellant could not show that duty of excise had been paid on the goods.

From the record, it also appears that the Tribunal has already given the substantial relief to the appellant. There is no scope to grant any further relief either in the name of rectification or otherwise. Hence, we uphold the impugned orders passed by the Tribunal. The answer to the substantial question of law is in favour of the Department and against the assessee. In the result, appeal filed by the assessee is dismissed. No order as to costs.