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TMI Blog2021 (7) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... is no other allegation in the show cause notice as regards the quantitative mismatch of input output ratio, etc. Hon ble High Courts and this Tribunal have repeatedly held that insignificant shortage in the stock of raw materials and finished goods does not lead inevitable evidence of clandestine removal, in absence of corroborative material on record. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... e, invoking the extended period of limitation, as to why the duty amount of ₹ 16,80,628/- on such shortage may not be demanded and recovered with proposal to appropriate from the pre-deposit made during investigation, with proposal to impose penalty. 6. The appellant contested the show cause notice stating that during the relevant period when the inspection were made, the staff, who was making the entries on computer was on leave. Thus, Mr. Ghore could not access the computer records to see the stock position. It was further urged that the shortage of 12.370 MT of M.S. Billets and 775.312 of Pig Iron, is a negligible fraction as against the annual production of 77,830.190 MT of sponge iron and 66,194.945 MT of M.s. Billets. Further, there was sales/captive consumption of sponge iron of 74,743.960 MT and 66,849.53 respectively and M.S. Billets of 66,849.53 respectively, during the financial year 2015-2016. The said shortage works out to 0.547 MT, which is normal in this type of industry. This is also evidenced from the fact that the Department itself have ignored the shortage found in the case of coal fines, iron ore and iron ore pellets. Whatever apparent shortage has been w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine removal is available on record, nor alleged, it was held that the apparent shortage cannot be termed as goods clandestinely removed. It was also observed that the apparent difference/shortage in weight works out to 0.018% in respect of billets as compared with the annual production and 3.34% in respect of the pig iron, as the appellant have received 22,525.60 MT of pig iron during the last 18 months. 8. Being aggrieved, the Revenue preferred appeal before the Commissioner (Appeals) on the ground that the Asstt. Commissioner has erred in observing that the stock verification was not done by actual weighment but was done on an approximate basis. It was contended that the stock verification was done in the presence of independent witnesses and the Dy. Manager (Accounts), Representative of the appellant. Further, the assistance was taken of Dinesh Patel, Surveyor of SECL, a PSU. Further, during the course of verification and drawing of panchnama, the stock taking was not disputed by the Dy. Manager (Accounts), Further, no retraction or dispute with regard to stock taking was filed later on, and the appellant have also reversed the duty so calculated on the date of inspection by de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustry, wherein the raw material is Iron Ore, Pig Iron, etc. The quality and the moisture content varies from consignment to consignment. Similarly in case of coal also, there is variation in the quality being ash content, volatile material, carbon content, etc.. Thus, yield varies on these several factors and also, on the weather conditions, and also on the condition of the furnace/kiln. As the finished product at the time of manufacture is in hot molten condition, the production is recorded on estimated basis. Although the appellant makes periodical adjustment from time to time for process loss or burning loss, but still there are bound to be some error and/or apparent difference. Further, admittedly, the Accounts Clerk or Data Entry Operator was on leave for the last few days and also at the time of inspection and thus, the entries were incomplete in the computer - stock register, which was maintained on the computer. The data given by the Dy. Accounts Manager at the time of inspection is only approximate figures, and not the exact figures. Further debiting of the duty worked out by the officers on the apparent shortage, does not amount to admission of clandestine clearance. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show preponderance of probability. II. Sayaji Iron & Engg. Co. (P) Ltd. - 1990 (45)ELT 104 (T), it was held that irregularities in maintenance of RG-1 Register cannot be conclusive evidence for clandestine removal of goods. III. J.C. Rolling Mills - 2012 (276) ELT 254(T), it has been held that every shortage cannot be presumed to be case of clandestine removal in absence of other corroborating evidence. However, charge of improper maintenance of accounts can be sustained. IV. CCE Vs. Minakshi Castings - 2011(274)ELT 180 (All.), it has been held that there is no matierla or evidence of any kind to support the findings, that there was clandestine removal, which did not tally with the physical stock. In substance, itw as found that thee was shortage of finished goods. The shortage of finished goods by itself could not unless it is related to clandestine removal of finished goods for which there was no material evidence, infer evasion of excise duty, and thus no penalty can be imposed. V. Vishwa Traders Private Limited - 2012 (278) ELT 362 (T), the Tribunal's order was challenged before the Gujarat High Court where the Division Bench refused to inference with the findings recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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