Facts 

• The appellant, M/s Shree Prithvi Iron Mills Pvt. Ltd., is engaged in manufacture of MS Angles, Channels, Bars etc., which are dutiable and Sh. Rajesh Garg, Director of M/s Shree Prithvi Iron Mills Pvt. Ltd. On 10.06.2014 the officers found on the search that there is a shortage of 151.95 MT of MS Angles in stock. On which Central Excise duty of Rs. 7,19,477 appeared to be payable. On investigation it is found that have been removed by them without raising invoices. 
• During pendency of investigation, On 09.10.2014 Income Tax authorities conducted a survey, in which it is found out entries relating to cash transaction made by Sh. Rajesh Garg during the period August, 2014 to October, 2014,  totalling Rs.2,99,35,000 and excess cash amounting to Rs. 2,34,127 was also found in the premises. Sh. Rajesh Garg has explained that Rs.2,99,35,000 were undeclared income from property business which were surrendered for taxation before Income Tax authority. and Rs. 2,34,127 is also undeclared income . 
• A show cause notice dated 17.05.2017 was issued, by the Central Excise Officer along with penalty of Rs. 5,00,000 under Section 11AC. 
• The appellants preferred appeal before the Commissioner (Appeals) who was pleased to reject the appeal of both the appellant company and the Director. 

Issue 

• Whether demand of duty has been rightly confirmed along with penalty on the allegation of clandestine removal. 

Order 

• The Tribunal observed that the amount of Rs. 3,01,69,127 have been accepted by the  Income Tax Authority, as income from other sources (property dealing). Thus, there is no reason to treat this amount as attributable to clandestine sales of finished goods. Thus, the duty demand along with penalty of Rs. 37,28,904 is set aside. 
• It also observed that the amount of Rs. 7,19,477 is corroborated by the documents resumed vide panchnama dated 10.06.2014 clandestine removal of shortage in stock (found in verification) is also admitted by the Accountant Mr. R. G. Choudhary, the Despatch Clerk Mr. Anuj Agarwal and the Director Mr. Rajesh Garg. Accordingly, this demand is confirmed with penalty. 
• Further, penalty under Rule 25 of Central Excise Rules is set aside and penalty on the Director under Rule 26 is reduced to Rs.2,00,000. The appeal is allowed in part.