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Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2014 (5) TMI AT This

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2014 (5) TMI 834 - AT - Central Excise


Issues:
Detection of shortages during Central Excise officers' visit to the factory, confirmation of demand of duty, imposition of penalty, maintenance of consolidated RGI register, discrepancies in the verification report, reliance on statement of proprietor, export of production, clandestine removal of goods, absence of corroborative evidence.

Analysis:
The case involved the detection of shortages of nuts, bolts, and washers during a visit by Central Excise officers to the factory of the respondents. The visiting officers found shortages valued at Rs. 90,45,240 involving duty of Rs. 14,76,183. The proprietor admitted the shortages and claimed that the goods were cleared against cash on 'as it is where it is' basis, with duty debited through PLA.

Proceedings were initiated against the respondents for confirmation of demand of duty and penalty imposition. The respondents argued that the shortage report was incorrect as they maintained only one consolidated RGI register for all varieties of nuts and bolts, making it impossible for officers to detect shortages on a variety-wise basis. They also contended that their production was mainly exported and not sold in the Indian market, contradicting the claim of selling a huge quantity of goods domestically.

The adjudicating authority confirmed the demand and imposed a penalty, which was challenged on appeal. The Commissioner (Appeals) set aside the original order, noting discrepancies in the verification report and lack of corroboration from independent sources. The Commissioner held that the findings of clandestine removal based solely on doubtful shortages could not be upheld.

In the final judgment, the Hon'ble Mrs. Archana Wadhwa found no infirmity in the Commissioner (Appeals) order. The Revenue's case relied heavily on detected shortages and the proprietor's statement, lacking independent corroborative evidence. The absence of variety-wise records and the nature of the products being mainly exported supported the respondents' claims. Consequently, the appeal filed by the Revenue was rejected, upholding the Commissioner (Appeals) decision.

Overall, the judgment highlighted the importance of maintaining accurate records, the need for corroborative evidence in cases of alleged clandestine removal, and the significance of considering the nature of production and sales channels in determining the validity of claims made during excise proceedings.

 

 

 

 

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