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TMI Blog1998 (6) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... ge being 54.6 MT. The authorised signatory of the factory admitted the shortage. The show cause dated 10-6-97 was issued alleging that these intermediate goods found short were used in the production of final goods which in turn were cleared without payment of duty. On such final goods cleared duty was demanded and penal action was proposed. The Assistant Collector confirmed the demand of Rs. 1,70,352/- and also imposed equivalent penalty on the assessee. Before the Assistant Commissioner the plea was made that the Department had not led any evidence to show that final goods were manufactured and clandestinely cleared. It was also claimed that loss of intermediate goods in production was a common feature. The Assistant Collector relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. 3. I have carefully considered the rival submissions and have seen the documents relied upon, including the statement of Shri Sunil Rastogi authorised signatory on which substantial reliance has been placed, both in its Hindi version as well as translated in English. The statement shows that it did not amount to a confession. After admitting that the process materials were short of the Book balance, he states as under : "In this connection I have only to state that out of this the finished goods might have been got prepared and sent out, which is not within my knowledge. I do admit the shortage. The cost of the finished goods manufactured out of this is Rs. 11,35,680/- on which the excise duty comes to Rs. 1,70,352/- the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds that an exact mathematical equation between the raw-materials and finished stock is not to be looked for. In the present case the shortage of intermediate product when compared to the stock is about 7.5%. It is the claim of the learned Advocate during 26 months preceedings they have received over 13000 MT of raw-materials. If the loss is held to be cumulative one it would come about 0.53. Such loss is normal and should not be held to be indicative of clandestine production. Thus, on the one hand, we have the legitimate claim of loss in production and on the other hand we have the admission of mere possibility. The state of evidence does not establish clandestine removal. In the cited judgment in the case of Leather Chemicals & Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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