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TMI Blog1997 (11) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... rtages and excesses in the premises of the first company. Notice was issued to it proposing recovery of duty of Rs. 27,69,59,000/- (approximately) on goods alleged to have been manufactured and clandestinely removed during the period 1st January, 1986 to 31st March, 1990, of Rs. 1,12,77,000/- on shortages in the finished goods and Rs. 57.48 lacs on excesses between 1st June, 1987 and 31st March, 1990. After considering the replies and hearing the assessees the Collector passed the order impugned in the appeal. In that order, he has held the demand on account of clandestine removal to be untenable and dropped it. He has accepted the contention of the assessee that the excess of production as revealed in the RG 1 register over the physical st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hortages but makes a general allegation that the assessee had suppressed various facts from the Department, maintained false, incorrect and incomplete accounts with an intention of defrauding Government revenue and deliberately did not produce documents. 4. In the order impugned in the appeal, the Collector has not specifically commented upon the applicability of the extended period insofar as the shortages are concerned. He says that, since the goods found short were removed without payment of duty, duty is demandable for the extended period. The mere fact that the goods were removed without payment of duty is insufficient to attract the proviso to Section 11A and it will only apply if it is shown that the assessee has wilfully suppres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... says While going through the charts I find that the shortages reflected in the show cause notice are on account of incorrect posting errors. A few examples are indicated as under : He gives a number of examples of such incorrect posting and goes on to say From the above example it is evident that the actual production should have been more than what was reflected in the RG 1 closing balance. The assessee, however, did not make any averment nor provided any evidence to show that actual stock available with them was more than the closing balance reflected in the RG 1 production and was actually the same which would have been in the RG 1 register, had the entries been correctly posted. 5. It is necessary, at this stage, to consider the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of excess he could not have applied the extended period to the shortages, without indicating specifically presence of factors which showed an intend to evade duty by the assessee. He has not said that this to be the case, nor as we have noted, has the notice alleged the existence of any such factors. If the appellant maintained its RG 1 register in such a manner that goods involving duty to the extent of Rs. 28.20 crores were wrongly entered it, only by negligence and carelessly it is surely not unreasonable to accept that shortage involving duty at Rs. 1.13 crores Rs. 54.78 lacs would have been caused by the same negligence. Apart from this contention raised, that during this period of five years, the unit had been visited by offi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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