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TMI Blog2001 (2) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of stock difference on the three days, they have stated that the goods have been taken for over checking from the production or from the finished stores and they have not removed from the RG 1 register. However, the plea put forth by them are not convinced. The difference in i.e., excess/shortage on the day of verification of stock on 23-8-1994 is more and they have also argued that they had not adjusted the stock as per their stock report on the early three occasions and hence, there is a difference in stock and also/to manual counting errors and mischief of labourers, etc. However, the investigating authority has not brought out any evidence to prove the clandestine removal but alleged only of assumptions and presumptions. No corroborative evidences such excess purchase and usage of raw materials, power consumption additional consideration received in excess of the invoice are forthcoming to prove the alleged clandestine removal. In case of Shreenath Cement Industries v. CCE, Jaipur - 1994 (73) E.L.T. 142 (T), the Department has proved the clandestine clearance by way of private raw material account showing much higher quantity than that in the statutory raw material registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nasmuch as there is a separate assessable value for each and every item. In view of the same, I find that the value works out to Rs. 5,09,526/- on the excess quantity seized on 23-8-94 based on the price lists filed by the Unit. In view of the above said facts, it is clearly established that M/s. MICO Ltd., have contravened the provisions of Central Excise Rules, 1944 and they are also liable for penal action. The excess goods valued at Rs. 5,09,526/- seized on 23-8-94 are liable for confiscation. I also hold that M/s. MICO Ltd., are eligible for the refund of amount paid in excess of the duty liability for which they have to file a refund application with the jurisdictional Assistant Collector who will process the same as per Sec. 113 of the Central Excise Salt Act, 1944 without any undue delay. and confirmed the Central Excise Duty amounting to Rs. 1,56,749/- on the shortages of excisable goods noticed on 23-8-1994 from M/s. MICO Ltd., Bangalore (Respondent hereinafter) under Rule 9(2) of the Central Excise Rules, 1944 read with proviso to Section 11A of the Central Excise and Salt Act, 1944 and ordered the adjournment of the same against Rs. 10,67,177/- debited vide PLA ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Glow Eqpt 22106 22887 781 Starter 214 170 -44 EPT 9 2 - 7 Alternator - - - Components 1913 2160 247 On the dates earlier to the checks conducted by the officers, the value of goods found short was Rs. 63,38,060/- and value of goods found excess was Rs. 6,86,722.47 and the total duty liable on the excess/shortages worked out to Rs. 17,52,196/-. It was alleged that the quantity found short on the stock taking dates as conducted by the assessee themselves were removed without payment of duty thereon and without following the Central Excise procedure. It was also alleged that the assessee has not initiated any steps to resolve the discrepancy noticed or took any action to record the excess quantity in RG1, thereby rendering them liable for penalty. Duty of Rs. 17,92,180/- was demanded on the shortage/excess noticed during the above three checks on 5-5-1993, 1-8-1993, 2-5-1994 including the shortage noticed on the date of visit of the Central Excise Officers on 23-8-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks maintained by the assessee and the actual stocks held by him, it is the assessee s duty to explain as to how the discrepancy has occurred. It was held that in the event of non-explanation by the person it would lead to drawing of an inference that there have been malpractices and evasion of duty. Similarly in the case of Asst. Collector v. C. Namperumal Gounder [1978 (2) E.L.T. J 56 (Mad.)] it was held that it was for the person to explain how the discrepancy has dropped up in case of discrepancy between stock book and actual stock. In the present case, the Commissioner himself has observed that the pleas put forth by the assessee explaining the discrepancies are not convincing. No evidence is produced by the assessee in support of their argument. The burden of proof in the case therefore lies with assessee which has not been done. Also when the assessee has not taken any action to rectify the discrepancies found, nor have informed the Department about the lapses, it cannot be said that the variations were forward up to 23-8-1994. and have prayed, that taking into consideration of these submissions, the order of Collector should be determinated to be not legal, correct and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld. Appellant appears to have misconstrued the bona fide act of the respondents in paying an amount of Rs. 10,67,177 voluntarily as amounting to accepting of the shortages reflected in the internal stock taking returns without appreciating the circumstances under which the amount was paid as stated in their letter dated 7-10-1994 addressed to the Assistant Commissioner of Central Excise (Preventive), Bangalore. The relevant portion is extracted hereunder for ready reference. QUOTE We our part in order to avoid any litigation would pay duty of Rs. 10,67,177/- by way of debit in our P.L.A for details shown in Annexure II to this letter. We would like to state that this amount is made voluntarily by us without prejudice to the right to claim refund on production of adequate evidence. UNQUOTE Thus the ground urged by the Learned Appellant that the payment of duty voluntarily amount to acceptance of the shortages in question is totally baseless. It is well settled law that when there is an allegation of clandestine removal, the burden of proof is squarely on the Department. It is not the case where the respondents failed to give explanation for the discrepancies noticed as f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods found also. This demand on shortages was not called for as their plea that goods were called back, for Quality Control checks from the Stores, and there could be counting errors which have not been considered. As regards demands on shortages, it was submitted that no evidence of clandestine removal was arrived or alleged. The payments effected was under protest. The discrepancies were carried over till the physical verification which was conducted in the presence of excise officers on 22-3-1994. The main reason for discrepancy is item issued for stock taking were not reduced from the RG.1 stock. The percentage of error is insignificant to cause the visitation of duty and penalty. Both sides reiterated their written statements. 6. We have considered the matter, and find - (a) the grounds taken in appeal by the Revenue, are conflicting from grounds extracted hereinabove numbered as (i), it will be apparent that the ground taken is that M/s. MICO had carried out checks of physical stock that was available, on various dates mentioned, with the computerised accounts.... . While in ground (ii) it has been averred .... Thus it cannot be said that variations on with reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... large number of components and counting errors. He has also not accepted the valuation on average basis as arrived at in the show cause notice but has determined separate assessable value. These determinations of value were not there before the stock taking officers. They are in the nature of fresh evidence and material relied by the Collector challenged before us. Therefore the ground in appeal that there was no new/fresh evidence produced by the respondents is not established. We observe that the Collector s findings are on the essential aspect of valuation, arrived necessary to determine duty, has not been challenged in appeal. We, therefore, find no valid ground for appeal in ground No. (iii) to set aside the order. (c) The next ground (iv) in appeal is regard onus being on the assessee to explain the discrepancy between actual stocks and RG 1 stocks. We have considered the ground and accept the same. However, it has to be first proved by the Revenue that there is a discrepancy between RG 1 stock and the actuals, then only the onus will shift on to the assessee. In the case before us, the shortages and excess noticed on 5-5-1993, 1-8-1993 2-5-1994 are not between actuals an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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