IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.E.A.No.120 of 2010 Date of decision: 24.8.2010 Commissioner of Central Excise Commissionerate. -----Appellant. Vs. M/s S. Channi Steel Pvt. Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Sukhdev Sharma, Standing counsel for the revenue. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the revenue under Section 35-G of the Central Excise Act, 1944 (for short, “the Act”) against the order dated 4.8.2009 passed by the Customs, Excise & Services Tax Appellate Tribunal, proposing to raise following substantial question of law:- “i) Whether the Judgment and order passed by the Tribunal is proper and legal? ii) Whether the Tribunal was right in dismissing the appeal filed by the Appellants? iii) Whether the Tribunal was correct in holding Commissioner (Appeals) order that when the inputs contained in final products have been duly accounted for, there is no question of C.E.A.No.120 of 2010 removal of excess goods clandestinely as Rule 25 of Central Excise Rules, 2002 provides that if manufacturer does not account for any excisable goods produced or manufactured or stored by him then all such goods shall be liable to confiscation; iv) Whether the Tribunal was correct in holding Commissioner (Appeals) order that penalty could not be imposed upon the director of the firm when penalty was imposed on the firm as Rule 26 of Central Excise Rules, 2002 provides penalty on person and not on the firm.” 2. The respondent-assessee is a manufacturer of iron and steel products. The representative of the department visited the premises of the respondent on 23.12.2003 and checked the stocks. As a result thereof, show cause notice was given to the assessee, alleging clandestine removal of goods, which was inferred from unaccounted finished excisable goods. After considering the stand of the assessee, the adjudicating authority passed order confiscating the goods and imposed redemption fine apart from penalty, which was set aside on appeal by the Commissioner (Appeal) with following finding:- “I fully agree with the above contentions of the Appellant in as much as the accountal of the goods on the estimate basis is not legally correct. When the inputs contained in the final products have been duly accounted for, there is no question of removal of the excess goods clandestinely. Moreover, there was no 2 C.E.A.No.120 of 2010 attempt to clear the goods without payment of duty. As contended by the Appellant the issue is squarely covered by the decision of CESTAT in the case of Indian Steel Wire Products reported as 1995 (78) ELT 298 wherein it has been held that goods are not liable for confiscation for merely non accountal in RG-1 and further no penalty is imposable. Similar view has been taken by the CESTAT in a number of cases reported as 2000 (117) ELT 644 2001 (96) ECR 533 2001 (129) ELT 616 2000 (91) ECR 569 2000 (120) ELT 444 2001 (133) ECR 691 In view of the above the confiscation of the goods is set aside. Penalty is reduced to Rs.5000/- for the technical lapse of non accountal of the goods. The penalty cannot be imposed upon the Director of the firm when penalty was imposed on the firm. So I set aside the penalty imposing on the Director (Appellant No.2). The duty amount will be paid at the time of clearance of the goods.” 3. The above finding has been upheld by the Tribunal. 4. We have heard learned counsel for the appellant. 5. Learned counsel for the appellant submits that once there was violation of rules in maintaining records, inference of clandestine removal was justified and thus, the Commissioner (Appeals) and the Tribunal were not justified in interfering with the order of the adjudicating authority from raising the amount of duty and penalty. 3 C.E.A.No.120 of 2010 6. We are unable to accept the submission. Whether in the facts and circumstances, inference of clandestine removal can be justified from the goods being found unaccounted for in record, is a question of fact, to be determined from case to case. The Commissioner (Appeals) as well as the Tribunal have examined the matter and recorded a concurrent finding of fact that the goods were duly accounted for and there was no clandestine removal and thus, merely because there was non- accounting of goods, penalty was technical and inference of clandestine removal was not called for. Thus, the finding recorded is not shown in any manner to be perverse. 7. No substantial question of law arises. 8. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 24, 2010 ( AJAY KUMAR MITTAL ) ashwani JUDGE 4