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2016 (12) TMI 716 - AT - Central ExciseShortages in stock - shortages of 1,236.240 MT of sponge iron - clandestine removal of 495.240 MT of sponge iron - demand of duty along with interest and penalty - Held that: - even if the assessee fails to explain the shortages themselves, the charge of clandestine removal cannot be imputed in absence of independent investigation to corroborate the allegation. As rightly observed by the Commissioner (Appeals), the investigations have failed to bring the charge of clandestine removal by leading evidences in the form of statement of buyers, transporters, flow back of funds, extra use of electricity, etc. He has rightly concluded that huge quantity of sponge iron would require a large fleet of lorries/trucks for their transportation and in the end in the absence of any such evidence on record, the findings of clandestine removal cannot be upheld. I also note that the Revenue has not produced any evidence for procurement of such a huge raw-material to manufacture the said quantum of assessee's final product. Before the final product is removed, the same is required to be manufactured. As such, heavy onus is placed upon Revenue to establish the manufacture of the said goods. There are no statements on records, either admitting the manufacture of the said goods or removal of the same in clandestine manner. As such, I fully agree with the Commissioner (Appeals) that the findings of clandestine removal based solely on the shortages detected by the officers cannot be upheld. As regards Revenue's allegation for clandestine manufacture and removal of 495.000 MT of sponge iron during the period of three days preceding to the visiting of officers, I find that the Commissioner (Appeal) has discussed each and every document recovered by the visiting officers and has held that the same cannot be made the basis. The Commissioner (Appeals) has taken into account all the relevant facts, discussed the various documents and has decided the issue on the basis of precedent decisions of the Tribunal. It is a fact that even deponents of the statements at the time of recording, have nowhere admitted the fact of clandestine removal. The entire case of the Revenue is based upon the assumptions and presumptions. Ld. Departmental Representative has argued that the appeal should be decided on the basis of preponderance of probability and Revenue cannot be expected to substantiate its case by arithmetical precision. However, I find that in the present case, the Revenue has failed to produce the evidences, even to tilt the weight of the evidences in their favour. Recovery of documents if any may be the starting point of investigation and it is expected from the investigating agency to go ahead to make enquiries from relevant factors. In the present case, Revenue's entire case is based upon the recovery of certain loose sheets or non-statutory documents, which admittedly require corroboration. No such corroboration being provided by Revenue, I am of the view that the findings arrived at by the Commissioner (Appeals) are appropriate and do not require any interference - appeal rejected - decided against Revenue.
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