2018 (5) TMI 1446 - AT - Central Excise

Clandestine removal - unaccounted finished goods Polyester Films - shortage of inputs Polyester Chips - Held that - so far the alleged confiscation of the Polyester Film 18.2MT is concerned the same is only a part of base production. The Panchnama proceedings started at 3.00P.M. Thus, the adverse inference drawn by the Revenue is fit to be set aside - it is apparent that the statement was recorded in the dead of the night and as such for some minor discrepancy in recording or the word not having been missed out in the subsequent question, in spite of specifically mentioning by Mr. Singh that the goods were yet to be tested and had not reached RG-1 stage, the adverse inference drawn by Revenue is fit to be set aside. So far the alleged shortage of Polyester Chips is concerned, it is admitted fact that the Polyester Chips lying in the silos were not measured. Thus, there is no proper basis for the charge of shortage of Polyester Chips - the charge of shortage is vague and fit to be set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
- Confiscation of allegedly unaccounted finished goods - Polyester Films
- Duty demand on the alleged shortage of inputs - Polyester Chips

Confiscation of Polyester Films:
The appellant, engaged in manufacturing Polyester Chips and Films, faced confiscation of unaccounted Polyester Films and duty demand due to alleged shortage of Polyester Chips. The officers found unaccounted Polyester Films ready for dispatch, leading to seizure and subsequent provisional release. Statements of company officials revealed discrepancies in quality testing and stock recording. The appellant argued that the seized goods were part of daily production, not yet tested, and not intended for clandestine removal. The Tribunal found the adverse inference by Revenue unjustified, as the Films were not tested and had not reached the required stage for dispatch. The appeal was allowed, and the impugned order set aside.

Shortage of Polyester Chips:
A second show cause notice alleged a shortage of Polyester Chips, indicating discrepancies in stock verification and continuous transfer to the film plant. The appellant contended that stock in silos and process line had not been considered, and no clandestine removal was proven. The Additional Commissioner calculated a net shortage after considering internal documents submitted by the appellant. Despite the alleged shortage, the Tribunal found the charge vague and lacking proper basis, leading to the appeal being allowed on this ground as well. The impugned order was set aside, granting the appellant consequential benefits as per the law.