2017 (7) TMI 1124 - AT - Central Excise

Clandestine removal - shortage of stock - goods were found lying in another plot of job-worker - Revenue entertained a view that the goods kept at the said Plot when actually removed in a clandestine manner from the factory premises of M/s TSL, and were stocked at the said plot for its subsequent sale without any payment of duty. Held that - the goods as sent out on job work, were found lying in another plot of the job worker, namely M/s Advance Steel Tubes Ltd. It is also admitted fact that the goods sent on job work are properly accounted for, in the records of the respondent-assessee. The goods were lying in another plot of the same job worker only for the sake of convenience - the allegation of clandestine removal does not stand and must fail. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against Orders-in-Appeal No. 57-CE/GZB/2010 & 86-CE/GZB/2008 passed by Commissioner of Central Excise & Customs.
2. Whether shortage in stock of goods was due to clandestine removal or for job work.
3. Whether goods cleared for job work were semi-finished goods or final products.

Issue 1:
The Revenue filed appeals against Orders-in-Appeal No. 57-CE/GZB/2010 & 86-CE/GZB/2008 passed by the Commissioner of Central Excise & Customs. The Tribunal had remanded the matter to the Commissioner (Appeals) for fresh consideration, which led to the dropping of proposed demand against the assessee. The Revenue was aggrieved and appealed before the Tribunal.

Issue 2:
The case involved a dispute regarding the shortage of PVC Pipes in the factory of the assessee, whether it was due to clandestine removal or for job work. The Commissioner (Appeals) found that the goods sent for job work were properly recorded and accounted for, and were found at the job worker's premises for convenience. The Tribunal upheld the findings, dismissing the Revenue's appeal, as there was no evidence of clandestine removal.

Issue 3:
Another issue was whether the goods cleared for job work should be considered as semi-finished goods or final products. The Commissioner (Appeals) held that the goods sent for job work were entered in the RG-1 Register as semi-finished goods, and no duty was required on such clearances. The Tribunal found no merit in the Revenue's argument and upheld the Commissioner's decision, stating that no adverse inference could be drawn in this regard.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue, upholding the findings of the Commissioner (Appeals) regarding the shortage of goods and the classification of goods cleared for job work. The respondent-assessee was entitled to consequential benefits. Additionally, another appeal arising from the same Order-in-Original was disposed of as in-fructuous.