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TMI Blog2012 (2) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... te that the Tribunal has committed any legal error in giving benefit of doubt to the assessee - there being no concrete evidence (as agreed by both the Members) of clandestine removal of the goods, the appeals are required to be allowed - appeal allowed - decided in favor of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... also reproduced the calculation given by the appellants which reached the conclusion that actual shortage was 28,799 Kgs. The sum and substance of the facts discussed above is that the appellants also did not dispute that there was shortage in the stock and the same had indeed been removed but the dispute is only about the quantity. We find that original adjudicating authority has not given any reason for not considering the worksheet given by the appellants. Even the calculation made in the statement drawn up by the officers did not have clarity. Further, shortage arrived at in panchnama also did not give basis for such conclusion. Further the appellant's contention that the normal melting loss and burning loss have not been discussed is also correct. In the absence of detailed reasoning for refusal to accept the figures submitted by the appellant and in the absence of proper quantification of shortage with reasons for refusal to accept percentage and various types of losses in process claimed and also the method to be adopted to calculate the loss, we feel that the adjudicating authority should have considered all these facts and give his conclusion. In the absence of any specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise had been conducted in an arbitrary and casual manner and the physical balance had been arrived at summarily without taking into account the materials which was in furnace at the time of visit of the officers. Thus, the show cause notice deserves to be quashed as unsustainable." 6. Even in the subsequent paragraph, they have contested the allegations of clandestine removal by submitting that the same have been levelled on the basis of hypothetical and arbitrary figures of percentage loss, without any sound corroboration of documentary evidence. They have specifically pleaded before the authority as also in their appeal memo that there was no corroborative evidence in the form of seizure of illicitly removed goods or in the form of sale records or illicit receipt or excess consumption of raw material, etc. The onus to prove clandestine removal rests heavily on the department and cannot be on the basis of the input-output calculation. As such, I am not in agreement with the observations made by my learned brother that the appellants did not dispute that there was shortage in the stock and the same had indeed been removed and the dispute is only about the quantity. Learned ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e President in his order dated 12-8-2010 has directed the Bench to reformulate the difference of opinion by observing that two Members cannot refer the entire appeal because of difference of opinion instead of making a statement referring the point or points of difference between them. Accordingly, the difference of opinion is being reformulated as under :- DIFFERENCE OF OPINION (i) Whether finding of clandestine removal can be upheld on the basis of input-output ratio of raw materials and final product. (ii) Whether the plea of the appellant that even as per the calculation, the shortage would be to the extent of 28,799 Kgs., if the benefit of various clauses is extended to them, can be held to be an admission on their part or the same is required to be held as a plea in the alternative. (iii) Whether absence of any specific evidence to support the clandestine removal of the goods would require the impugned order to be set aside or the matter is required to be remanded for re-calculation of shortages by adopting the appellant's plea in the alternative. (iv) Whether the statements made by authorized signatory and by the partner are required to be corroborated with sufficient e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion that there was clandestine manufacturing and removal of the goods. It is his submission that the first appellate authority as well as adjudicating authority has relied upon the statements of the partners to hold that there was a clandestine manufacturing and removal of the goods, but it is not the factual position and doesn't reflect from the correct position and hence the statements needs to be discarded. It is his submission that the calculations based upon the input-output norms is totally incorrect and the assumption of there being a shortage of 28,799 kgs of raw material is an alternative submission, which is not to be considered as an acceptance of shortage of raw material and subsequent manufacturing and clearance of the finished goods. It is his submission that Revenue authorities have not brought on record any evidence regarding clandestine manufacturing and clearance. He would submit that as regards the evidence of clandestine manufacturing and clearance, the law is squarely settled in the case of Durga Trading Company - 2002 (148) E.L.T. 967 (Tri.-Del.) and upheld by the Apex Court as reported in 2003 (157) E.L.T. A315 (S.C.). It is his submission that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. It is seen from the records that the entire charge of clandestine removal of the finished goods is based upon the theoretical working of calculating the consumption of inputs and presumptive clearance of the finished goods from the factory premises of the appellant. The assumptions which have been considered by the Revenue authorities are totally faulty inasmuch as that the charge of clandestine removal is first to be established based upon the clandestine manufacture and removal of the goods. In the instant case, except for the statements of the partners that there was clandestine removal of the finished goods, there is nothing on record to indicate that the appellant assessee had, in fact, manufactured the final products out of the inputs detected short on the calculation of input-output ratio. I find that as correctly pointed out by the ld. Counsel that this Bench in the case of Suzlon Fibres Pvt. Ltd. (supra), in Para 3 has categorically stated as under : "3. We agree with the above contention of the ld. Advocate, apart from the input-output ratio, there is no evidence on record to show clandestine manufacture and clearance of the goods. Such cases are required to be e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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