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TMI Blog2016 (3) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... r there is found existence of fudging of the records, hold that the discrepancy or variation in the physical stock found, is a normal variation and does not call for any adverse inference. Further find that the appellant assessee also have not made any attempt to explain the variation found at the time of inspection, except alleging that there is discrepancy in the manner of stock taking. Also take note of the fact that the appellant have not protested the deposit of duty pursuant to investigation and maintained silence, till the issue of show cause notice. In this view of the matter reduce the duty confirmed by 50% and further uphold the waiver of penalty by the ld. Commissioner (Appeals). - Decided in favour of assessee in part - Ex Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nama was drawn up on the spot and a statement of Shri Veer Pal Sisodia, Accountant and Central Excise In-Charge of the factory, was recorded. He stated that the sale of the goods is controlled by Head Office. He makes entries in daily production and dispatch of Register on the basis of daily production and raw materials and consumption report provided to him. The said records are maintained under the supervision of Shri N.S.Rana. Statement of another person, one Mr. Anil Kumar was recorded, who prepared the daily production report and consumption of raw materials and handed over the same to Shri V.P.Sisodia. The Excise officers conducted physical verification of both finished goods and raw materials in presence of Shri N. S. Rana and Mr Muk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exact reasons responsible for the shortage noticed in the stocks of finished goods and raw materials. Accordingly, it appears that the appellant has clandestinely removed the goods found short at the time of physical stock taking on 26.11.2010 in a manner other than as prescribed in the Central Excise Act, 1944, with intent to evade payment of duty. Accordingly, the appellant assessee contravened the provisions of Rule 4 (duty payable on removal), Rule 6, rule 8 (Manner of payment of duty), rule 10 (Daily stock account) and rule 11 (Goods to be removed on invoice) of Central Excise Rules, 2002. Further in terms of sub rule 5 of rule 3 of Cenvat Credit Rules, 2004, the assessee was required to pay an amount equal to the credit availed in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods. 5. The SCN was adjudicated vide order in original dated 28.2.2013 and the proposed demand of ₹ 3,43,626/- on shortage of finished goods and ₹ 40,438 on shortage of raw materials was confirmed further penalty of ₹ 3,43,626/- was imposed on the appellant company under rule 25 read with section 11 AC and ₹ 40,438/-under rule 15 of Cenvat Credit Rules,2004 read with section 11 AC of the Act and the payments had been made of the assessee the same was appropriated. Being aggrieved the appellant preferred appeal before the Commissioner(Appeals). The learned Commissioner (Appeals) allowed the appeal in part by confirming the duty but was pleased to delete the penalty imposed both under Rule 25 of CCR and Rule 15 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Central Excise, Meerut I: 2013 (290) ELT 0392 (Tri.-Del.) has allowed the appeal by observing that the charges of clandestine removal cannot be upheld on mere shortages. Therefore, there must be clear evidence and mere shortage in final products, which could be due to variety of reasons, cannot be the basis of removal by evading duty. Thus, the allegation of clandestine removal without any concrete evidence does not have any merit in view of catena of judgements in which it has been uniformly held that clandestine removal is a serious allegation which requires to be proved by way of tangible evidence and allegations on the basis of assumptions and presumptions are un-sustainable. The appellant deposited the duty involved on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the revenue have not made out any case of clandestine removal and they have made out a case of improper recording of production records and/or record of raw materials - inputs. As such, he has erred in confirming the duty. Accordingly, he prays for setting aside the duty confirmed by the impugned order. 7. The ld. DR relies on the impugned order. He further states that even subsequent to the date of inspection the appellant have not explained properly the variation in their records and physical stock found at the time of inspection. As such when the appellate authority have confirmed the duty, penalty is automatic. 8. Having considered the rival contentions, I find that the manner of stock taking on the date of inspection, have g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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