9911796707
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Issues:
1. Duty payable on goods removed without payment. 2. Confiscation and redemption of unaccounted goods. 3. Imposition of penalty under Central Excise Rules, 1944. 4. Discrepancies in stock verification and production recording. 5. Legal sustainability of demand for duty and penalty imposition based on average weight. Analysis: 1. The appeal was filed by M/s. Simplex Castings Ltd. against the order of the Collector, Central Excise (Appeals) regarding duty payment on goods removed without payment. The original order by the Dy. Collector found the party guilty of removing goods without duty payment and ordered payment of Rs. 83,153.66 as duty, confiscation of unaccounted goods, and imposed a penalty of Rs. 5,000 under Rule 173Q of Central Excise Rules, 1944. 2. During a surprise visit, Central Excise Officers found discrepancies in stock at the factory of the appellant, leading to a shortage of 216.889 MT of small M.S. Ingots and an excess of 17.881 MT of big size Ingots. The appellant's explanation regarding the recording of production on average basis due to the absence of a weigh-bridge was challenged, leading to a show cause notice for duty demand, confiscation, and penalty imposition. 3. The appellant contended that the production records were maintained based on averages as the weigh-bridge was not in close proximity, and rejected Ingots were sent for re-melting. The discrepancies were argued to be minor, and the method of accounting explained the excess. Legal arguments were supported by citing relevant case laws to challenge the duty demand and penalty imposition. 4. The Respondent argued that discrepancies were real due to the same method of calculation for both varieties of Ingots, justifying the duty demand, penalty imposition, and confiscation. The absence of a weigh-bridge was initially admitted but later contested by the appellant, raising doubts on the accuracy of production recording. 5. The Tribunal analyzed the case considering the discrepancies were based on average weight and found no evidence to support the exact weight of discrepancies. Citing legal precedents, the Tribunal held that averages cannot be the basis for duty demand and emphasized the need for definite proof of clandestine removal. The demand based on presumptions and assumptions was deemed unsustainable in law. The penalty imposition was upheld due to incorrect maintenance of production records based on average weight, which was deemed legally unsustainable. 6. Ultimately, the appeal was partly allowed based on the findings that the demand for duty was not sustainable in law due to reliance on average weight for discrepancies determination. The penalty imposition was upheld due to incorrect maintenance of production records, emphasizing the necessity of exact production recording for duty calculation.
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