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TMI Blog2016 (1) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... tobacco falling under sub-heading No. 2403 99 10 of the First Schedule to the Central Excise Tariff Act, 1985 and is availing cenvat credit to the extent of specified duty paid on inputs as prescribed under the Cenvat Credit Rules, 2004. On 6.12.2005, a show cause notice demanding duty of Rs. 2,19,127/- was issued to the appellant on the basis of search conducted in the premises of the appellant. During the search on 2.12.2004, the officials of the department found shortage of 3717 kg. of raw tobacco and 2793 kg. of coloured tobacco and 3717 kg. of raw tobacco was allegedly converted into coloured tobacco which was not recorded in stock and 2793 kg. coloured tobacco found short was unaccounted and it appears that the same has been removed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coloured tobacco issued for manufacture were effectively available for verification. The learned counsel further submitted that the entire demand is barred by limitation. He further submitted that as per Rule 10 of the Cenvat Credit Rules, 2004, the appellant is maintaining daily stock account in respect of their final products. They are also maintaining issue slips i.e. chits in respect of cenvatable inputs issued for manufacture of final products. A copy of declaration under Rule 22(2) of the Rules is annexed by the appellant. All records are maintained on daily basis at the close of the day. Further, the Rules do not require that every time there is an issue of raw material, it should be recorded in statutory records. There is no provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when officers of the department visited the factory and recorded the statement of their manager, Shri Onkar Nath Gupta, wherein he categorically explained with verifiable facts the reasons for shortage of raw tobacco and coloured tobacco stored in their respective store rooms. There cannot be any presumptions and assumptions contrary to verifiable facts. We have gone through the statement of Shri Gupta and we find that the alleged shortage of goods could have been verified as per the statement of Shri Gupta, but the department instead of doing the verification for determining the shortage, relied upon the only fact that the appellant did not produce the issue slips. The learned counsel cited the judgment of the Hon'ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944 has been invoked on the ground that short found raw material has not been recorded in the account books/records maintained by the unit and dutiable goods have been cleared without issuing invoices etc. on the sole intention of evading duty. He also submitted that invoking the extended period is wrong because the entire raw tobacco and coloured tobacco were duly accounted for and available in the manufacturing premises. This fact was categorically explained by their manager. The appellant has maintained all such records as are statutorily required and submitted all returns on time. They have maintained complete transparency and explained the shortages on the same day itself. He also submitted that there is no allegation of suppression o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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