9911796707
TMI Blog2016 (7) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... it Rules, 2004. In March, 2014, the officers of Central Excise conducted stock verification of raw materials and finished goods in the premises of the appellant. Upon such verification, the officers arrived at a shortage of 79.573 MTs of H.B. Wires (raw materials), 23.069 MTs of H.B. Wires (finished goods) short. Proceedings were initiated against the appellant for recovery of duty of Rs. 4,73,759/- on the ground that the said goods have been cleared without payment of duty. The Original Authority confirmed the demand and imposed equal amount of penalty. On appeal, the Commissioner (Appeals) vide his impugned order upheld the demand and penalty. 2. Against this order, the appellant is in appeal. 3. Ld. Counsel for the appellant submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by the appellant. The whole demand is based on the alleged shortage of raw materials based on the rough estimation. In absence of any evidence of illicit manufacture, unaccounted clearance, transport, etc., no duty demand can be sustained. (e) Reliance was placed on various decided cases to reiterate that mere shortage of raw materials alone cannot sustain the charge of clandestine removal. 4. Ld. AR supported the findings of the lower authorities. He stated that stock taking was done in the presence of two witnesses and the Director of the appellant. No objection was taken by the appellant at that time. Having agreed to the shortage, it is for the appellant to explain such shortage. The demand of duty towards such materials fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court held that mere shortage of finished goods in stock taking is not enough to hold the charge of clandestine removal. In Chandrapur Enterprises Ltd. - 2014 (310) ELT 904 (Tribunal-Delhi), the Tribunal held that when the quantity of finished goods was determined on estimation basis only, the same cannot be treated as real shortage for alleging clandestine removal. In R.S. Industries - 2014 (301) ELT 382 (Tribunal-Calcutta), it was held by the Tribunal that even when shortage is admitted but no investigation was done to establish clandestine removal of goods, no penal action can be taken against the assessee. 7. Considering the facts of the present case, I find that apart from the allegation of shortage based on estimation, no other corr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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