2015 (6) TMI 982 - AT - Central Excise

Clandestine removal of goods - short found finished goods - stock taking of CTD and TMT bars was done on the basis of average taken up by weighing 5 bundles of each size - Held that - in the absence of any cogent evidence in support of the allegation of clandestine removal except the average weighment done in this case the charge remains unproved. Further, in reply to the show cause notice appellant has given the details of weighment and as per the weighment the difference works out to be around 3.3 MT in the stock of 1092.730 MT which is only a meager quantity - charge of clandestine removal remained unproved. - Demand of duty set aside - Decided in favor of assessee.

Summary

Issues: Allegation of clandestine removal of goods, Weighment method and accuracy, Evidence supporting the allegation

In this judgment, the appellant appealed against an order demanding duty on the grounds of alleged clandestine clearance of goods. The investigation revealed a shortage of 180.899 MT in the appellant's stock, leading to the issuance of a show cause notice for duty payment, interest, and penalty. The appellant contested the allegation, arguing that the weighment was done on an average basis and discrepancies were minimal. The appellant claimed the allegation lacked concrete evidence regarding the actual removal of goods. The respondent, however, argued that the weighment method was accurate and supported by physical verification. The respondent cited a previous case to justify the confirmation of the demand. The tribunal examined the case's factual matrix, focusing on the weighment discrepancies for different bundle sizes. The tribunal noted variations in average weights due to specific bundle weights, highlighting the inaccuracy of the weighment method. Additionally, the tribunal referenced a previous case to establish norms for proving clandestine removal, which were not followed in this instance. The tribunal concluded that the charge of clandestine removal was unproven due to insufficient evidence beyond average weighment. The appellant's detailed weighment data further undermined the allegation, showing only a minor discrepancy in stock quantity. Consequently, the tribunal set aside the impugned order, ruling in favor of the appellant and granting necessary relief.