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TMI Blog2012 (11) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... k and accounted stock. On verification, they found shortage of one transformer of 6.3 KVA and two transformers of 40 KVA out of 15 transformers accounted in RGI. Apart from that, 537 transformers were lying in the factory which was not accounted anywhere. 2. Revenue was of the view that the transformers which were not accounted for in the records, were intended for clearance without payment of duty. They were also of the view that transformers which were found short, were cleared without payment of duty. Therefore, a show cause notice was issued proposing to demand excise duty of Rs. 6,592/- on the three transformers found short along with proposal for interest and penalty. Further it was also proposed to confiscate the 537 transforme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed. The appellants addressed letter HO/MD/95/1182, dated 3-8-1995 to the Assistant Commissioner which was followed by reminder dated 6-9-1995. Nothing was communicated by the Department which implied approval for the procedure being followed. Ultimately, the entire matter was brought to the notice of the then Jurisdictional Commissioner, namely, Commissioner, Kanpur vide letter dated 12-10-1998 requesting for approval of procedure adopted in maintaining RG.I register. The letter was not acknowledged. No reply was received either. 5. The submission of the appellant in the matter of practice followed is as under :- "That appellants have been recording the transformers as semi-finished when the core coil assembly is placed in the tank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d through banking channels and therefore, the allegation that these transformers were kept for removal without payment of duty has no basis. Regarding the shortage of three transformers detected during the stock taking, the appellants submit that because the stock taking took considerable time and the processes lasted late into the night and since transformers were stored at different places in the factory, the appellants could not locate the transformers at that time and it was just an error in counting since 537 transformers in semi-finished stage were stored in different places. It is submitted that after the Central Excise officers again visited the factory on 14-12-2009, the three transformers said to be missing on 1-2-2010 detected an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to indicate the number of transformers in the finishing room will attract provisions of Central Excise Rules. He relies on the decision of the Tribunal in D.S. Screen Pvt. Ltd. v. C.C.E. - 1990 (50) E.L.T. 475 (Tri.). 9. Considered arguments of both 'sides including the written submissions given on 23-2-2012. We note that the issue of the stage at which transformers should be entered in RGI Register has been under correspondence between the Department and the appellants for more than 2 decades, with no clear directions from the Department. In such circumstances, there is no reason to conclude that the appellant had failed to account for excisable goods manufactured by him especially because the goods were not in packed c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argument that three such transformers were shown on 1-2-2010 and they are lying in stock even at present because we are not accepting the contention that the three transformers produced much after the stock taking were the transformers which were found short on the day of stock taking. We also take note of the decision of the Madras High Court in the case of Alagappa Cements Pvt. Ltd. v. CEGAT, Chennai - 2010 (260) E.L.T. 511 (Mad.) holding that it is justified to demand excise duty on goods found short vis-a-vis accounted stock. So we do not want to interfere with the duty confirmed on account of the 3 transformers found short and penalty imposed on that count. 11. Thus the appeal is allowed partially by setting aside the confiscati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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