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2018 (5) TMI 1668 - CESTAT HYDERABADClandestine removal - excesses and shortage of stock - fabric was manufactured and clandestinely removed, without payment of duty - Held that:- A prudent man will not conclude that the fabric was manufactured and clandestinely removed, without payment of duty in the absence of corroborative evidence - The fact that during cross examination, the labour contractor himself said that he gets paid twice for the fabric, once at the grey stage and once at finished stage further dilutes the evidence to substantiate the allegation of clandestine removal of fabric. The Officers have verified the stocks of the man made fabrics i.e. textiles and raw material and compared them with Form IV respectively and found differences. I agree with the department that the Commissioner should not have ignored the mahazar which was drawn on the spot and instead relying on a passing remark made in the original O-I-O drop the entire demand while ignoring the recorded evidence - there were shortages in one stage and excesses at another. When the stocks were taken on the same day, at same time, it would be reasonable to assume that there was some inaccuracy in recording by the assessee with some stock being shown as issued for processing and not actually being put in the process resulting in excess stock in one stage and a shortage in the other - demand on this count dropped. Goods found in excess in the vehicle - vehicle was intercepted by the officers based on the information they received and the documents they recovered with the distributors - Held that:- While the Commissioner had questioned the evidence provided by the department and examined it minutely, the vague and baseless statement by the respondent that 5 metres sarees should be taken as 4.2 metres only so that their figures match was accepted by the Commissioner without any basis whatsoever. Therefore, find that the duty of ₹ 3,995/- is payable on this excess goods found in the truck and this along with recovery of duty, confiscation and redemption fine thereon be imposed. The quantity of excess fabric cleared without payment of duty is also liable to be confiscated. As find a redemption fine of ₹ 5,000/- is reasonable for the purpose. Confiscation of excess goods found in the factory premises - Held that:- The mahazar being a document drawn up at the time should be accepted along with the contention of the respondent that the excess and shortages of the fabrics need to be set off against each other in view of the fact that grey products supposed to have been issued for production were still lying in stock - the excess quantities of fabric as recorded above are liable for confiscation. Appeal allowed in part.
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