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TMI Blog2009 (1) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... cted stock verification. They recorded RG-1 balances and goods that were stored in MS tanks and two concrete pits and two kutcha pits. The quantity which was stored in kutcha pits was detained for being stored in unapproved premises. Later on the detention was lifted and the respondent cleared 883.057 MT of molasses. The second stock verification was done by the range officers in the unapproved premises and the same was quantified under volumetric method. The Range Officer found that the physical stock was 1065.780 MTs as against book balance of 1188.777 MTs arriving at a shortage of 122.997 MTs of molasses. Show cause notice was issued proposing to demand duty with interest and imposition of penalty on such shortages, which were found. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The above factual position was not considered by the Commissioner (Appeals) while passing above cited Order-in-Appeal. (iii) It is also seen from the Records that the quantity physically available was quantified by adopting the formula given by the Factory Manager and the shortage was recorded in the Pachanama dated 22-9-1999. This shortage quantity was not objected by the Factory Manager. Further, the quantification was done in the presence of two independent witnesses, which fact was also not taken into consideration by the Commissioner (Appeals) while passing the above cited Order-in-Appeal. (iv) Commissioner (Appeals) also erred in taking into account that as per the panchnama quantity physically available in the factory wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission made at length by both sides and perused the records. We find that learned Commissioner (Appeals) while setting aside the OIO, that confirmed the duty came to the following conclusion : 7. The Appellant s contentions on remission owing to deterioration in quantity of molasses is belated in that such contention should have been raised at the time of first detention, when the issue of storage in Unapproved premises was first addressed. The quantum of molasses (2071 MT) detained under the detention memo dated 27-11-1998 holds the key to the issue. I find no elaborate quantification in each of the two concrete closed pits; kutcha pits; and the premises of the distillery unit. Contrasted against the systematic quantification effected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the molasses was stored. 9. Keeping in mind the above, it is pertinent to examine the adjudication proceedings. The first detention occurred on 27-11-1998. No notice was issued for the 2071 MT of molasses stored in unapproved premises and the lower authority has rightly presumed belated approval in his findings. Even at the time of lifting the detention, the notes indicate that the molasses in the kutcha pits was substantially diluted post-rains between April-November, 1998; and that the (diluted molasses) flowed on to the road as submitted by the MD in his statement dated 27-11-1998. This only means that the impugned quantity could well have flooded the roads after the rains in 1998, which automatically entails a reduction in the RG-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It can be seen from the above reproduced portion that revenue has not given any contrary evidence to the finding arrived at by the learned Commissioner (Appeals). It is undisputed that molasses was stored in kutcha pits. It is a common knowledge that the molasses which is stored in kutcha pits is always open to vagaries of nature. There could be increase/decrease of stock of molasses due to climatic condition. We find that the revenue in their grounds of appeal has not brought out evidence to show that there was in fact clearance of 122.997 MTs of molasses from the factory premises of the respondent. In the absence of any contrary evidence, it is not open to revenue to say that there was removal of molasses without payment of duty. The rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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