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2014 (2) TMI 967 - AT - Central ExciseDemand of differential duty - Shortage in stock - Held that:- there is a shortage of 11.8 tones of finished goods in the factory premises when the officers visited the said premises. Today also, there is no dispute as to the shortage of finished goods as the appellant herein is only claiming that the shortage is not worked out correctly and they are unable to ascertain the correct shortage since the Revenue has not given the calculation sheet which was drawn at the time of stock taking. In my considered view, the shortage was sought to be explained by the Manager and the Director of the company by giving an explanation that over a period of time there could be shortage due to the sizing of all the ingots manufactured by them. To my knowledge, even such an explanation could have been accounted for only few kgs but could not be considered valid for entire shortage which has been noticed. Shortage which is detected by the department is of the finished goods manufactured by the appellant. I also note that the appellants have never challenged the shortages. On the background of such a factual matrix, I find that there is no corroborative evidence adduced by the Revenue either in form of any statement of the purchaser or a transporter or the statement of the director or the general manager as to the allegation of removal of these goods which were found short. Since there is no allegation of clandestine removal, but there is a shortage of finished goods. I hold that the appellants are liable to pay the excise duty on the said finished goods shortages which is noticed by the authorities during the stock verification. As regards the penalties imposed on the individuals who are General Manager and Director of the appellant-assessee, I find that there is no reason for visiting them with penalty under Rule 26 of the Central Excise Rules, 2002 inasmuch as, there is no evidence of there being a clandestine removal of the finished goods nor there is any role attributed to the individuals/appellant in the shortages which was noticed during the stock taking by the authorities. In the absence of any such evidences, I am of the view that the penalties imposed on these individuals unsustainable and are liable to be set aside - Decided partly in favour of assessee.
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