2011 (6) TMI 296 - AT - Central Excise

Demand - shortage of stock - goods were clandestinely removed - Held that - shortage was undisputedly arrived at based on measurement of dip reading method and the shortage is accumulated over a period of one year and the same is recorded in the order in original as 0.03% - method adopted for ascertaining the stock and considering the insignificant quantity of shortage which occurred over a period of one year, demand set aside.

Summary

Issues:
Appeal against order setting aside demand for shortage of clinker.

Analysis:
The appeal before the Appellate Tribunal CESTAT, DELHI was filed by the department challenging the order of the Commissioner (Appeals) which set aside the demand of Rs.48,555/- on clinker of 194.22 MT found short. The shortage was identified during an internal audit of the company, and the physical stock at the time of stock taking was 72,592 MT of clinker. The shortage of 194.22 MT was determined through the dip reading method and was adjusted in the RG I. The original authority upheld the demand, alleging clandestine removal of goods, while the Commissioner (Appeals) overturned this decision due to the method used for stock assessment and the insignificant quantity of shortage occurring over a year. The genuineness of the shortage was not disputed, but the appeal challenged the Commissioner's decision, arguing that the remission route should have been followed.

The shortage, established through the dip reading method, was acknowledged to have accumulated over a year, amounting to 0.03% of the total stock. The Tribunal, after considering the facts and circumstances of the case, concluded that there was no basis to interfere with the Commissioner's order. Consequently, the appeal was rejected.