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TMI Blog2012 (12) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise department visited the factory of the appellants and conducted a stock taking. They found shortage of 28,760 ltrs. of finished goods, 1,02,739 kgs. of inputs and 69,805 nos. of packing materials in the physical stock available as compared to the accounted stock. The Revenue proposed to demand excise duty in respect of finished goods found short as also reversal of the CENVAT credit taken on inputs and packing materials which were found short. A show-cause notice issued in this regard was adjudicated confirming demand of duty of Rs. 1,21,109/- in respect of finished goods, Rs. 19,06,004/- in respect of inputs and packing materials. Further, a penalty of Rs. 1,21,109/- was imposed under Section 11AC of the Central Excise Act. 3.&e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med the demand under Rule 9(2) which Rule is for clandestine removal. There is no evidence to prove clandestine removal by the revenue. Mere shortage of inputs and finished goods will not lead to the conclusion of clandestine removal from the factory. Therefore, it is but proper to remand the matter to the original authority for de novo consideration. The appellants do not wish to contest on the amounts which they have deposited and wherever there was admission of shortage of inputs/raw materials. The contention is regarding other demands on which dispute has been raised. The appellants are at liberty to produce evidences and to explain the shortages. The Commissioner has to get the details verified and pass a detailed speaking order after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods. They also submit that the shortages is detected as the difference between accounted stock and the physical stock seen assuming that the accounting has been perfectly done. 6. The counsel for the appellants submits that during the relevant time, their accounts were not computerized because of which some errors had happened in accounting itself and such errors also contributed to the difference in stock. 7. The main contention of the appellants is that the Revenue has not been able to prove any instance of clandestine removal of the finished goods or the inputs on which CENVAT credit has been taken and, therefore, the case made out by Revenue can at best be an issue of improper accounting of goods and it cannot be a case of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... huge to be brushed aside. Further he also argues that the shortages have to be seen as a percentage of quantity in stock rather than as percentage of goods manufactured by them over a period of time. 10. He argues that the Appellant had not maintained their accounts properly and that is very obvious from the excesses and shortages noticed. He submits that the appellants are very casual about maintaining the accounts and it is not justifiable to condone such lapses in the case of a company with high turnover as the present appellant. 11. He also draws our attention to the decision of Hon. Madras High Court in the case of Alagappa Cements v. CEGAT - 2010 (260) E.L.T. 511 (Mad.) where the court upheld duty demanded on quantity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king is understood to mean that there was a difference between accounted stock and physical stock but this cannot be proof enough to conclude that the accounted stock was correct. The overall facts of the case suggest otherwise. A proceeding for imposing penalty for not maintaining accounts properly would have been more appropriate rather than demanding duty on goods found short vis-à-vis the goods as reflected in the accounts. The decision of the Hon'ble Madras High Court in the case of Alagappa Cements (supra) is not a decision that can be applied to the facts of case considering the nature of commodity involved and the large number of final products manufactured by the present appellant. 15. Considering the overall facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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