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2015 (2) TMI 517 - AT - Central ExciseClandestine removal of goods - shortage of finished goods - Reversal of CENVAT Credit - Held that:- Average basis counting of the MS Ingots was done and there after it was arrived that physical finished goods available in the factory of the appellant was compared with the statutory records and a shortage of 8-8.5% was found. I find that apart from that, no other corroborative evidence has been ascertained in this matter to allege the clandestine removal of the goods. Although the authorized representative of the appellant has admitted the shortage but he has not admitted any fact that any goods have been removed from the factory without payment of duty. - In that scenario charge of clandestine removal of the case is not sustainable. I further find that in that case, the shortage was found on average basis more than 10 percent but in the case in hand the shortage is less than 10 percent. - The physical verification of the goods has been done on average basis and there is a shortage of only 8-8.5%, further there is no corroborative evidence has been brought on record to allege clandestine removal of the goods. In this scenario, I hold that appellant is not liable to pay duty on the shortage of finished goods found during the course of visit on 07.08.2010. - After going through the CBEC Circular No.877/15/2008 dated 17.11.2008, I find that on such discount given by the supplier on defective goods, the appellant is not required to reverse the Cenvat Credit availed on the inputs - as duty is not payable by the main appellant, therefore the penalties cannot be imposed on both the appellants - Decided in favour of assessee.
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