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2019 (8) TMI 671 - CESTAT KOLKATAClandestine manufacture and removal - validity of stock verification proceedings - shortage of goods - vires of Rule 223A of CER - HELD THAT:- Proceedings under Rule 223A for shortage of goods is to be based on stock taking in the factory “in the presence of the proper officer”. The said rule makes it explicit that the involvement of the “proper officer” for applicability of the said provision and for initiation of any proceeding for recovery of any duty short paid found on the basis of the said stock taking carried out in the presence of the “proper officer” is an absolute requirement. The materials on record herein undisputedly evidence that there was no involvement of the “proper officer” in the subject annual stock taking carried out on its own by the appellant - There is thus no stock taking under Rule 223A of the said Rules. Hence, the impugned order and the duty demand confirmed thereby under Rule 223A are also sustainable since the stock taking cannot be held to be under Rule 223A of the said Rules. It is also found that there is no denial of the fact that the stocks were ascertained by the appellant on the basis of sectional measurement basis and not on actual weighment basis, but, however, the clearances were effected upon actual weighment basis. In such cases there is bound to be difference in weighments. A case of shortage or excess of stock and/or clandestine removal thereof without payment of duty is not established in such a situation. In the case of ROURKELA STEEL PLANT [SAIL] VERSUS COMMISSIONER OF C. EX., BHUBANESWAR [ 2000 (7) TMI 726 - CEGAT, KOLKATA ] this Bench of the Tribunal, in the case of another sister unit of the appellant, has also held that based upon the difference shown in the figures in the annual financial accounts entered according to sectional weight and RGI register showing dispatch figurers on Railway Receipt weighment basis, a case of clandestine manufacture and removal cannot be sustained. Appeal allowed - decided in favor of appellant.
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