2009 (1) TMI 723 - AT - Central Excise

Summary

Issues involved:
The issues involved in the judgment are the proper conduct of stock verification, consideration of length of ingots in determining weight, duty payment obligations of the assessee, and the authority's duty to hear both sides before dropping a demand.

Stock verification and weight determination:
The department appealed against the lower appellate authority's order rejecting their appeal, citing that the length of the ingots was not considered during stock verification. The department argued that the stock taking was accurate and not challenged on the day of verification, with unexplained shortages of inputs and finished goods.

Contention of both sides:
The department contended that the stock taking was done accurately, while the respondents' advocate supported the lower authorities' decision based on discrepancies in the stock verification report.

Duty payment obligations:
The judgment emphasized the duty of the assessee to explain any shortages in stock of inputs and finished goods for which duty credit has been taken. It highlighted the importance of stock verification for ensuring correct recording of production and duty payment.

Remand for fresh decision:
The judgment found that the lower appellate authority did not properly consider the case records and set aside the impugned order. The matter was remanded for a fresh decision after hearing both sides, including stock taking officials, to determine actual shortages and duty payment obligations.

Conclusion:
The appeal was allowed by way of remand for a fresh decision by the lower appellate authority, emphasizing the importance of thorough examination of stock verification and duty payment obligations.