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2015 (5) TMI 136 - AT - Central ExciseShortage of finished goods and raw material - Clandestine removal of goods - Hed that:- Authorised signatories of assessee company admitted shortage of the goods and agreed to pay the duty leviable thereon - They also accepted that there is difference in recording of production in two registers, in RG-1 and Daily Progress Report Register. - appellant in their reply to show cause notice retracted the statements. I find that after the visit of the officers, the appellant had accepted the Panchnama in their various statements recorded on various occasions. It is seen that the Panchnama was signed by the Authorised Signatory of the assessee Company who had not disputed preparation and authenticity of the Panchnama at any point of time. Retractions of statement in reply to the show cause notice is not corroborated with any evidence and therefore, such a retraction can not be accepted. So I agree with the findings of the lower authorities that there is no requirement of cross-examination. Shri N.K. Surana in his statement admitted the shortage of the raw materials. It is noted that shortage of raw material for various resins. There is no material available on record that the raw materials were clandestinely removed. The appellant contended that the shortage of raw material was consumed in the finished goods, removed clandestinely and the demand of duty was confirmed. There is no requirement of one-to-one co-relation of input and finished goods in the CENVAT scheme. Hence the demand of duty on the shortage of raw materials used in the manufacture of final product, against which demand of duty raised, is not justified. Director and the Authorised Signatory of the assessee had admitted the authenticity of the register in various statements. They have not disowned this register at any point of time, before filing of the reply to show cause notice. It is already observed stated that retraction of statement in reply to the show cause notice is not corroborated with any evidence and therefore, it can not be accepted in the eye of law. Hence I agree with the findings of the lower authorities in respect of demand of duty in the Daily Progress Report Register. Regarding the imposition of penalty on the Director of the Company, I find that he has stated in his statement that he was not aware of the maintenance of Daily Progress Report Register in their factory. The findings of the lower authorities that the Director was aware of clandestine removal of the goods, is without any basis. Hence, imposition of penalty on the Director of the assessee is not proper. Having considered the peculiar facts and circumstances of the case, I find that it is not a fit case for confiscation of plant and machinery and raw materials, and imposition of redemption fine is not warranted. - Decided partly in favour of assessee.
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