2014 (3) TMI 870 - AT - Central Excise

Shortage of stock - physical verification of goods - Held that - No doubt preponderance of probability may come to the rescue of revenue but to take shelter of such principle there should be circumstantial evidence and precision in the inquiry demonstrating the real criteria adopted for determining the shortage. No conclusion should flow on mere surmises or assumption or presumption. Whim and capies being alien to justice, the present impugned order has no leg to stand - Decided in favour of assessee.

Summary

Issues: Lack of objective criteria in determining shortage, Bias in investigation

Issue 1: Lack of objective criteria in determining shortage
The judgment revolves around the lack of objective criteria in determining shortage when the goods were amenable to physical weighment. The appellant argued that the adjudication was based on a subjective concept of shortage without any concrete evidence to support the findings. The appellant highlighted discrepancies in the process, pointing out that the physical verification of a significant stock of finished goods within a short span of time was humanly impossible. The absence of weighment sheets further raised doubts about the authenticity of the investigation. The judgment emphasized the importance of circumstantial evidence and precision in the inquiry to establish the real criteria adopted for determining the shortage. It concluded that the impugned order lacked a solid foundation and was based on mere surmises or assumptions, leading to the decision to set aside the demand.

Issue 2: Bias in investigation
The judgment also addressed the issue of bias in the investigation process. The appellant raised concerns about the impartiality of the Central Excise officers involved in the operation. The appellant argued that the Panchnama, which formed the basis of the investigation, was not supported by weighment sheets, indicating a lack of physical verification by the visiting officers. This raised suspicions of fabrication and lack of credibility in the investigation process. The judgment highlighted the importance of conducting fair and unbiased investigations to ensure justice and integrity in legal proceedings. It emphasized that whims and caprices have no place in the delivery of justice and that any decision based on such biases cannot stand. Consequently, the appeal was allowed, highlighting the significance of upholding principles of fairness and objectivity in investigations and adjudications.