1996 (10) TMI 281 - AT - Central Excise

Summary

Issues:
1. Discrepancy in the stock of molasses found during inspection.
2. Challenge to the reliability of dip measurement method.
3. Alleged shortage of molasses and imposition of duty and penalty.
4. Interpretation of earlier stock verification results and its impact on the current proceedings.

Analysis:
1. The case involved a discrepancy in the stock of molasses found during an inspection at the factory of the appellants. The physical stock of molasses was lower than the recorded balance, leading to a shortage of 2046.34 quintals. This resulted in the imposition of duty and penalty by the Collector of Central Excise, Jaipur.

2. The appellants challenged the reliability of the dip measurement method used by the Department to calculate the weight of stored molasses. They argued that the method was not accurate and cited a Tribunal decision where a similar charge based on dip measurement was dropped. The appellants contended that the alleged shortage was a result of an artificial excess recorded in an earlier stock verification.

3. The Departmental Representative supported the order, stating that the shortage was admitted by the Chief Chemist of the appellant company. He argued that the excess found in the earlier stock verification and the shortage in the current proceedings were not connected, as they related to different tanks. The Department urged for the dismissal of the appeal.

4. The Tribunal analyzed the submissions from both sides and considered the impact of temperature variations on the density and volume of molasses during storage. The Tribunal noted that the alleged excess weight during the earlier stock verification was likely due to the method of calculation and seasonal variations. The Tribunal found discrepancies in the Department's calculation method and previous findings, leading to the conclusion that the charge of shortage was not sustainable. Consequently, the Tribunal set aside the order, allowing the appeal.

In conclusion, the Tribunal found in favor of the appellants, highlighting the inconsistencies in the Department's calculations and the impact of seasonal variations on the stock of molasses. The judgment emphasized the importance of accurate measurement methods and the need to consider all relevant factors in assessing stock discrepancies.