2001 (4) TMI 147 - AT - Central Excise

Summary

Issues Involved: Challenge to duty demand u/s 11A of CE Act, 1944 based on eye estimation of shortage in man-made fabrics, cotton fabrics, and clothes without physical verification.

Summary:
The appeal contested the duty demand of Rs. 2,04,553.69 u/r 9(2) read with Section 11A of the CE Act, 1944, on the alleged eye estimation of shortage in man-made fabrics, cotton fabrics, and clothes. The department did not conduct physical verification but relied on the manager's eye estimation. The appellants argued that mere eye estimation cannot be the basis for duty demand, citing judgments emphasizing the department's burden to prove shortage. The Commissioner (Appeals) accepted the shortage but based the confirmation of demand on presumption due to the manager's statement. The Tribunal found the presumption unjustified, as burden of clandestine removal lies on the department, and physical verification is essential. The appeal was allowed, setting aside the duty demand.

The Learned DR argued that physical measurement was impractical due to the large quantity of cloths, so eye estimation was necessary. However, the Tribunal found the department's reliance on eye estimation unjustified, emphasizing the need for physical verification to confirm duty demand.

In conclusion, the Tribunal held that presumption and assumption cannot be the basis for confirming duty demand, emphasizing the department's burden to prove shortage through physical verification. The appeal was allowed, setting aside the duty demand based on eye estimation alone.