2006 (12) TMI 314 - AT - Central Excise

Summary

Issues involved: Confirmation of demands under Rule 9(2) of CE Rules for shortage of Granites, imposition of penalty, consideration of shortage as clandestine removal, reduction of penalty by Commissioner (Appeals).

Confirmation of demands under Rule 9(2) of CE Rules for shortage of Granites:
The appeal arose from Orders-in-Appeal confirming demands under Rule 9(2) of CE Rules for shortage of Granites, with penalty imposed and later reduced to Rs. 10,000 by the Commissioner (Appeals).

Consideration of shortage as clandestine removal:
Despite the appellant's explanation of shortage due to breakage during the process of polishing Granite slabs, the authorities concluded that the shortage indicated clandestine removal. The appellant argued that mere shortage found by measuring the Granites cannot be considered as clandestine removal, citing relevant case law.

Reduction of penalty by Commissioner (Appeals):
The Commissioner (Appeals) reduced the penalty imposed on the appellant to Rs. 10,000, considering the explanation provided regarding the shortage of Granites.

Conclusion:
The Tribunal observed that the mere measurement of stock and finding of shortage does not establish clandestine removal. Corroborative evidence of removal of Polished Granites, final product, is necessary to uphold the charge of clandestine removal. The Revenue failed to provide evidence of clearance without duty payment to specific buyers, as required by relevant case law. The impugned orders were set aside, and the appeals were allowed with consequential relief, if any, based on lack of evidence and failure to meet the principles guiding confirmation of demands in cases of clandestine removal.