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TMI Blog2017 (7) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... nce on clandestine removal even if there is a difference between the two records of the appellants the clandestine removal cannot be concluded only on that basis - demand set aside. As regards the other 3 appeals bearing No. E/202/08, E/203/08 and No. E/762/08 these are related to refund claim of the duty paid by the appellant on the difference of quantity of Excise records and Lab records. Therefore the refund is consequential to the demand case which was decided in E/201/08 and E/167/09. All the 3 appeals deserve to be remanded to the adjudicating authority for reprocessing the refund. Appeal allowed in part - part matter on remand. - E/201/08 - A/88184-88188/17/SMB - Dated:- 30-6-2017 - Shri Ramesh Nair, Judicial Member None for appellant Shri V.K. Shastri, Asst. Commr (AR) for respondent ORDER Per: Ramesh Nair The facts of the case are that the appellants are engaged in the manufacturing of excisable goods viz. Fevicol MR Easyflow, Fevicol Young AT Art MR, Fevicol Young At Art Craft Glue falling under Chapter Sub Heading No. 3506 9190 and Acron Students Poster Oil Colours falling under Chapter Sub Heading 3213 1000 3213 9000 of Central Exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal they submitted that the Commissioner (Appeals) has wrongly held that there is no evidence of extra filling of the material in the tubes whereas the net weight checking report was duly certified by the department of Legal Metrology evidencing extra filling of the material in the tubes and the same was handed over to the Commissioner (Appeals) during personal hearing. They submit that the difference of quantity shown in the Excise records and Laboratory records is only due to variation in the quantity of the material while filling in the tubes during production and there is no case of clandestine removal in the factory. Therefore, the impugned order is not proper. 4.1 I have perused the order-in-original dated 20.10.2006 wherein learned adjudicating authority has given detailed findings considering all aspects in the process of manufacturing, probability of variations in the quantity shown in the Laboratory records and Excise records and come to the conclusion that there is no case of removal of goods without payment of duty. The said finding is reproduced below:- 19. 1 have carefully gone through the SCNs, the replies submitted, the directions of the Appellate Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hesive is estimated for the purpose of planning the filling process and to plan the execution of orders in hand, besides planning for subsequent batch of production. 22. I have perused the process of manufacturing from the stage of mixing of the raw materials till the stage of packing into unit containers. The manufacturing of the said adhesive involves a complicated process of mixing of various organic' chemicals and process the same to attain homogeneity; which further involves transferring the bulk adhesive from the production / storage tanks to filing tanks through pipelines. In the filling machines, the desired weight of the product is packed / filled in to the retail packs. The very nature of the product (viscous and sticky) would result in variation in the quantity estimated at the bulk tank and the aggregate of the actual quantity filled in to the unit containers. The assessee's contention that the bulk is estimated by dip reading method and which cannot be considered as accurate is also logical and can be an obvious cause for the difference. 22(i). l am also convinced with the genuine difficulty in arriving at the accurate quantity at the bulk stage. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be arrived at. 26. I find that the variation in the quantity between the lab register at bulk stage and the quantity as. per RGI is varying from 1.7 to 2.6 for periods covered by the four different SCNs; with an average variation of 1.9% for the entire period, as detailed in the following Table-Il.: Sl. No. Period Qty. as per Lab Register Qty as per RGI (Production) Register Difference % of shortage in Qty. 1. 01.02.99 to 31.12.03 1798229,00 1766918.27 31310.73 1.7% 2. 01.01.04 to 30.11.04 397972.00. 389791.13 2180,87 2.1% 3. 0l.l2.04 to 31.07.05 336120.00 330137.28 6082.72 1.8% 4. 0l.08.05 to 3l.01.06 262023.00 255139.44 6883.56 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled in the unit containers and to meet the requirements under Standard: Weights and Measurement Act (packaged commodities) (1977), also reveals that the net quantity filled in about 1-2 of the material more than the quantity mentioned on the unit package. The' reasons offered for filling a little excess quantity over and above the quantity mentioned on the unit containers i.e, to avoid violation of Standard Weights and Measurements Act, 1977 and also to gain confidence and goodwill of the customers, not only sounds logical but also is supported by the Net Weight Checking Reports. When the declared weight is 20 gms, the average weight of the sample as per the Net Weight Checking report dated 09.04.04, was 20.5 gms. Similarly, as per the Net Weight Checking reports dated 20.09.04 and 07.110.04 with regard to the unit packing of 30 gms, the average-weight was 30.6 gms. 31. From the above facts and circumstances, I am convinced that the difference in the quantity between the quantity shown in the lab register and production register is on account of following reasons :- i)' The quantity estimated through dip reading method, while material was in the bulk tank, was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mentioned reasons, cannot be enforced, 35. I also accept the assessee's contentions that the department has not put forth any other evidence in support of the demand alleging clandestine removal. As I have already mentioned above, the entire demand is merely based on the discrepancy between the quantity shown in lab register and the quantity recording in the production records. Therefore, in the absence of any corroborative evidence, the demand cannot be raised on such differential quantity, particularly, when the difference has been well justified, in the above terms. I agree with the assessee's contentions that the ratio of the following decisions of the Tribunal, are applicable to the present case: i) CCE Vishakhapatnam Vs. Sagar Cements Ltd. - 2005 (180) ELT 196 (Tri-Bang.) - in which it was held that the discrepancy of 1% with reference to the total quantity of cement cleared falls within the permissible limits under provisions of Standard Weights and Measurements Acts - demand not sustainable. The ratio of this decision is applicable to the present case, although its applicability to a commodity charged to duty at the specific rate i.e. based on weight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nil 9,21,381/- De Nova 2. V.Adj 1 SCNI BRl39/Ch.1I/04-05 dt. 11.1.05 1.1.04 to 30.11.04 242743 2163 2 44,906/- De Nova 3: V.Adj/SCNI8R/39/Ch.1I1 04-05 22.9.05 1.12.04 to 31.7.05 190316 3806 1,94,1221- De Nova 4. V.Adj.(B.Ram)3-1/Ch,11I06-07 24.4.06 dt. 1.8.p5 to 31.1.0~ 224097 4482 2,28,579/- Fresh 4.2 Against the above findings of the adjudicating authority, Commissioner (Appeals) has in a very short cut manner set aside the order by giving a very hypothetical and cryptical finding which is reproduced below:- I have gone through the case records and considered the rival contentions. The authority's finding that there may be be extra filling in the tubes was not supported by independent evidence. The respondents had only produced Net Weight c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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