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2019 (12) TMI 713 - AT - Central ExciseClandestine removal - shortage of finished goods as well as raw material - Can duty be demanded on the raw material found short during the course of investigation or not? - HELD THAT:- Admittedly duty has been demanded from the appellant on shortage of raw material, the said raw material is not manufactured by the appellant and in terms of Section 3 of Central Excise Act, 1944, duty is payable on the goods manufactured by the assessee. Admittedly these goods have not been manufactured by the appellant, therefore, no duty can be demanded from the appellant on shortage of raw material. At the most, the Cenvat credit can be asked to reverse which is not the case of Revenue. The said mistake done by the Revenue cannot be rectified at this stage - the demand of duty in shortage of raw material is set aside. Merely shortage recorded during the course of investigation finished goods, can duty be demanded without further investigation or not? - HELD THAT:- As the value adopted for the clandestine removal of finished goods no explanation has been given by the Revenue as how they have calculated the price of the finished goods @ ₹ 50,000 /MT for hex nut and ₹ 50, 000/ MT for hex bolt. In the absence of any evidence placed on record with regard to that, the duty paid by the appellant of ₹ 1,04,500 is taken to be corrected as the issuance of these invoices have not been disputed by the Revenue before issuance of the show cause notice. Penalty - HELD THAT:- In the case of Anand Founders & Engineers [ 2015 (11) TMI 1166 - PUNJAB & HARYANA HIGH COURT ], the jurisdictional Hon’ble High Court has taken a contrary view holding that without further investigation, the penalty cannot be imposed, therefore, relying on the decision of the jurisdictional Hon’ble High Court - the penalty cannot be imposed on the appellant. Appeal allowed - decided in favor of appellant.
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