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2023 (6) TMI 1394 - AT - Central ExciseClandestine removal - physical stock of finished / semi-finished goods shown in the Annual Stock Statement varied when compared with the opening balance of Stock of production and clearance as per ER 1 returns - corroborative evidences or not - HELD THAT - In the impugned orders the demand has been confirmed on the ground that Rule 10(1) of the Central Excise Rules 2002 about maintenance of records has not been followed by the appellants and the shortages have been noticed annually which clearly proves that the goods have been clandestinely removed without payment of duty. They also claimed that the shortages are much beyond the condonation of losses as laid down by the Board Circular. However these shortages itself cannot be a ground for evidence of clandestine removal. Further the impugned orders invoke proviso to Section 11A on the ground that the department had come to know all the facts only in 2009 after Annual Stock taking statement was filed by the appellant. The fact that clandestine removal of any goods has not been proved with any evidences except to state that the statements of shortages itself proves the offence of clandestine removal is too farfetched. Moreover regular notices were issued for different units of the appellant at Mangalore Bhadravati and Mysuru and these notices confirmed by the Commissioners were set aside by this Tribunal. Hence the present appeals based on similar facts do not sustain. The appellant s in their own case STEEL AUTHORITY OF INDIA LTD. VERSUS COMMISSIONER OF C. EX. MYSORE 2005 (10) TMI 181 - CESTAT BANGALORE the Tribunal has held that the discrepancy between the RG1 stock and the physical stock are based on the estimated production and not on actual weighment. Comparison between two estimations is inherently inaccurate. Because of these shortages if any is inflated due to errors in taking opening balance and physical stock. Considering the practical difficulties in estimating the actual stock and in view of the submissions made by the appellant the Tribunal had set aside the impugned order. The demands are set aside and accordingly penalty is also set aside - Appeal allowed.
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