2004 (2) TMI 112 - AT - Central Excise

Summary

Issues:
Shortage of goods during stock verification, validity of Panchnama, voluntary payment of duty, appeal against duty demand and penalty imposition, validity of stock-taking process, credibility of witness statements, consideration of documentary evidence, legal consequences of retracted statements.

Analysis:
The case involved a dispute regarding a shortage of goods found during a stock verification at the appellant's factory, leading to a demand for excise duty and penalty imposition. The stock verification was conducted in the presence of the company's Director and independent witnesses, with the shortage recorded in a Panchnama. The Director acknowledged the shortage and voluntarily paid the duty on the goods found short. However, in response to a show cause notice, the appellant claimed the shortage was accounted for in previous reports and presented invoices for consignments dispatched after the stock-taking date. The original authority confirmed the duty demand and imposed a penalty, which was partially vacated by the Commissioner (Appeals), leading to the present appeal.

The appellant argued that the Panchnama was invalid as one witness denied being present during the stock-taking, and the officers did not verify the quantity of each variety of goods. They also contended that consignments dispatched after the stock-taking date indicated the availability of the allegedly short goods. The Departmental Representative (DR) asserted that the Director's admission of the shortage and the veracity of the Panchnama facts were sufficient grounds for upholding the decision.

The Tribunal noted that the Director's statement acknowledging the shortage was not retracted, and the affidavit produced later lacked credibility due to its timing and lack of prior submission. The Tribunal emphasized that the appellant's belated denial of the shortage was not a valid explanation and cited precedents where retracted statements were not accepted. Considering the admitted shortage and absence of a valid explanation, the Tribunal upheld the duty demand, dismissing the appeal against the lower authorities' decision.

In conclusion, the Tribunal found no reason to interfere with the lower authorities' decision to confirm the duty demand based on the admitted shortage of goods during stock verification. The appeal was thus dismissed, affirming the duty demand against the appellant.