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2018 (8) TMI 477 - CESTAT ALLAHABADClandestine removal - shortages and excesses of goods - Revenue entertained a view that the short found quantity of 1650.426 MT of SS Coils totally valued at ₹ 8.74 Crores (approx.) involving duty of ₹ 90.09 Lakhs stand removed by the appellant clandestinely without issue of Central Excise invoices and without their accountal in the statutory records - for excess found goods it was believed that the same were not entered in the records with an intent to clear the same without payment of duty. Held that:- It is seen that the excesses and the shortages found by the officers are much on the higher side and there is nothing on record to show as to how such huge stock of finished products and raw materials was weighed by the officers. There are no inventories prepared and no methodology adopted by the Revenue for weighing such a huge stock stands placed on record. As per the appellant they do not have any weighing scale in their factory and for verification of the stock, 360 trucks are required to be engaged. There is nothing on record to show as to whether the trucks were put into services for weighing the huge stock - Admittedly the iron and steel items are heavy items and cannot be weighed without engaging a proper procedure to weigh the same. The stock-taking was not actually done by the visiting staff and the alleged shortages and excesses are based upon eye-estimation. In such a scenario the allegations of shortages of the goods cannot be accepted. The stock-taking undertaken by the visiting officers was not actual, but based upon eye-estimation and as such the result of the same has to be ignored, in any case, the entire case of the Revenue is based upon such shortages leading to the allegations of clandestine removal - The question which arises is as to whether the shortages by themselves can lead to the findings of clandestine removal of the goods or not stands dealt with by the Tribunal in number of precedent decisions. It is well-settled law that the allegations of clandestine manufacture and removal are required to be proved by the Revenue by production of positive, tangible and legal evidences. The onus to prove so lies heavily on the Revenue and is required to be discharged by production of admissible evidence. In the present case, apart from the shortages, which are also of doubtful nature, the Revenue has not produced any evidence in the shape of actual manufacture of the goods, their removal by engaging transportation, the identity of the buyers and the receipt of consideration etc., to show that the goods have actually been sold by the assessee. No statement of any employee or the production manager of the company has been recorded to establish that the goods were actually manufactured in the factory. No source of raw material stands disclosed by the Revenue - mere shortages cannot lead to the allegations and findings of clandestine manufacture. In the present case also the Revenue’s entire case is solely based upon the shortages so detected by them and there is no other independent evidence to corroborate the said charges. No efforts have been made by the Revenue to find out the source of raw material, the manufacture of the goods in the assessee’s factory and their clearances from the factory. The goods alleged to be removed clandestinely require huge raw materials for their manufacture and there being is not even an iota of evidence on record to show that from where such huge raw material has been procured by the assessee. Excesses of goods - Held that:- The stock-taking was not proper and as such the alleged excesses have to be held as pseudo - In the absence of any evidence to show that such excesses, even if real, were not recorded in the statutory records with a mala fide intention to clear the same without payment of duty, their confiscation is not justified - confiscation set aside. There is no justification for imposition of penalty on the Director of the company Shri Sanjeev Agarwal - penalty set aside. Appeal disposed off.
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