2013 (7) TMI 641 - AT - Central Excise

Unexplained shortage of finished goods - Shri Subhash Chand Garg who was authorised signatory of the appellant in his statement during enquiry accepted the shortage of goods Held that - Relying upon the judgment of Hon ble High Court of Madras in the case of Alagappa Cement (P) Ltd. vs. CCE, Chennai 2010 (10) TMI 131 - MADRAS HIGH COURT , onus is on the appellant to furnish satisfactory explanation. If the stock shortage remains unexplained, that leads to the conclusion that such consequence was out of clandestine removal Appeal dismissed Decided against the Assessee.

Summary

Issues:
1. Shortage of finished goods during stock taking.
2. Adjudication of penalty on shortage quantity.
3. Appeal against the decision of the Adjudicating Authority.

Analysis:
1. The case involved a shortage of 77.97 M.T. of finished goods during stock taking, which was admitted by the appellant. The Adjudicating Authority examined a statement by an authorized signatory of the appellant accepting the shortage. The appellate authority confirmed the shortage quantity and upheld the adjudication, reducing the penalty from Rs. 2,69,743/- to Rs. 15,000/- based on previous tribunal decisions. The appellant's plea of improper weighment and reconciliation of stock statements was rejected due to lack of evidence supporting their claims.

2. The Tribunal found that the shortage was accepted by the appellant without any contrary evidence. The statement of the authorized signatory remained un-retracted, further supporting the admission of the shortage. The Commissioner dismissed the appellant's arguments regarding improper weighment and reconciliation of stock statements due to lack of evidence. The shortage of stock was considered unexplained, leading to the conclusion of clandestine removal, as per the decision in the case of Alagappa Cement (P) Ltd. vs. CCE, Chennai. The onus was on the appellant to provide a satisfactory explanation for the shortage, which was not fulfilled, resulting in the dismissal of the appeal.

3. The appellate order was upheld, and the appeal was dismissed based on the findings that the shortage of stock was unexplained, indicating clandestine removal. The decision highlighted the importance of providing satisfactory explanations for shortages during stock taking to avoid adverse consequences.