1997 (9) TMI 185 - AT - Central Excise

Summary

Issues:
1. Stay petition for dispensing with the pre-deposit of duty and penalty based on excesses and shortages found during stock verification.

Analysis:
The applicants, engaged in manufacturing glass bottles/vials, sought to set off excesses against shortages discovered during a physical stock verification. Their argument was based on the large variety of items and the possibility of mix-ups due to stacking by semi-literate workers. The learned Advocate cited a previous Tribunal decision supporting this set-off principle. However, the Respondent, opposing the waiver, highlighted that the stock verification was conducted satisfactorily with no objections raised by the manufacturers' employees. They emphasized that excesses were recorded only after quality control tests, indicating no mix-up. The Tribunal noted the presence of excesses and shortages but found the applicants failed to establish a prima facie case. Consequently, they directed the deposit of duty amounting to Rs. 5,46,955.00 by a specified date, while waiving the pre-deposit/recovery of the penalty.

The Tribunal acknowledged the fragile nature of glass bottles and the potential for breakage, but observed that the stock taking report did not consider breakages in determining shortages. Despite the argument about mix-ups due to the variety of items and breakage concerns, the Tribunal concluded that the applicants did not sufficiently support their case. As a result, the duty amount was mandated to be deposited within a specified timeframe, with non-compliance leading to the dismissal of the appeal without further notice. The compliance reporting date was set for 12-12-1997, emphasizing the importance of adhering to the Tribunal's directive to avoid adverse consequences.