Customs, Excise and Gold Tribunal - Tamil NaduNarayan Industries vs Commissioner Of Central Excise on 5 March, 2008Equivalent citations: 2008(120)ECC272, 2008(156)ECR272(TRI.-CHENNAI)ORDER
 

 P. Karthikeyan, Member (T)1. The subject application has been filed by M/s. Narayan Industries, Chennai for waiver of predeposit and stay of recovery of a demand of Rs. 88,987/-, equal amount of penalty imposed under Section 11AC and appropriate interest due on the duty for the delay in payment. After hearing both sides on the stay application, the stay application is dismissed and the appeal is taken up for final disposal with the consent of both parties.2. The facts of the case are that pursuant to intelligence on evasion, the officers of Chennai-I Commissionerate visited the premises of the appellants on 22.1.2005. Inspection of the records maintained by the assessee and verification of physical stock available in the factory premises revealed that there was a shortage of 40.39 MTs of M.S ingots which are the raw material of the assessee. After recording statements from the persons concerned with production and clearance of excisable goods in the assessee firm, proceedings were initiated to demand duty on the final products that could have been manufactured and cleared from the missing quantity of raw material. After due process of law, the original authority demanded duty of Rs. 88,987/-, appropriate interest thereon, and imposed equal amount of penalty as the duty demanded. The impugned order upheld the order of the original authority.3. Ld. consultant appearing for the appellants reiterates the grounds in the appeal. He submits that in view of various case law on the subject, the appellants were entitled to receive the benefit of waiver of penalty and interest in view of the fact that the duty involved was paid as early as 10.3.2005 whereas the show-cause notice was issued on 30.1.2006. He also prays that demand may be re-quantified considering the value determined by the lower authorities for demand of duty as cum duty value in the light of the ratio of the apex court's decision inCCE v. Maruti Udyog Ltd.. He submits that the lower authorities had determined the assessable value taking into account the average value adopted by the assessee for clearances of identical finished goods in the material period.4. Ld. SDR submits that the authorities had adopted the average actual assessable value the assessee had adopted during the material period, for clearances of finished goods found to have been clandestinely made by the assessee. Therefore, there is no question of re-quantifying the demand applying the ratio of the apex court's decision in Maruti Udyog Ltd.5. I have studied the case records and the submissions by both sides. In the instant case, the assessee has not raised serious challenge to the demand of duty. Their main prayer is to waive the penalty and the demand of interest. I find that in the following decisions, the apex court, High Court of Karnataka and the Larger Bench of the Tribunal had decided that even in cases of intentional evasion of duty, no interest was demandable and no penalty was imposable if the assessee concerned paid the duty involved before the issue of the SCN:1) Commissioner v. Rashtriya Ispat Nigam Ltd. 2003 (163) ELT A53 (SC)2) CCE v. Shree Krishna Pipe Industries2004 (61) RLT 17 (Kar.)3) CCE v. Machino Mantel 2004 (165) ELT 466 (Tri.-LB) 
 

Respectfully following the above ratio, I vacate the penalty and interest affirmed in the impugned order.6. As regards the prayer to re-quantify the duty demand, it is seen from the records and as argued by ld. SDR, the lower authorities had adopted the assessable value of the assessee, for the goods found to have been clandestinely cleared by the assessee during the material period. Therefore, I find that the value adopted for quantifying the demand is not the sale price of the goods clandestinely removed but the assessable value of identical goods cleared during the material time. Therefore, the lower authorities have adopted the appropriate value for determining the duty due. Accordingly, I reject this prayer of the appellants. The appeal is disposed of in the above terms.(Dictated and pronounced in open court)