TMI Blog2005 (3) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... Narasimhan, learned Advocate mentioned that the appellants manufacture chewing tobacco and Quiwam and avail of Cenvat credit of the duty; that Central Excise Officers visited their factory premises on 8-6-2001 and took possession of a file containing rough worksheets prepared for the finalisation of the Balance Sheet for the year 1999-2000; that the Central Excise Officers took the figures shown as opening balance of glass bottles as on 1-4-2000 and worked out theoretically the stock balances of the different sizes of bottles that should have been there on the date of inspection i.e. 8-6-2001, assuming arbitrarily damage/breakage @ 2% for all the sizes of bottles; that thereafter Excise Authorities theoretically worked out the quantity and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation; that it is clear from the examination of Shri Vijay Sahu, Inspector, that the 2% allowance has been considered only from the stage of receipt of the bottles in the storage area of their factory up to the final packing of the manufactured tobacco into saleable wholesale lots; that thus losses at the earlier stage of despatch from the suppliers premises (which are distant places like Mumbai) up to the stage of receipt in their factory premises had been ignored, that such loss on the basis of evidence filed by outstation suppliers could be as high as 8% to 10% depending on the size of the bottles; that thus the theoretical calculation of shortage of bottles on the assumed breakage loss of 2% is entirely a fictitious figures and conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the entry of the semi-finished goods remaining in stock and taken as 1260.00 which on proper scrutiny of the relevant documents should have been shown as 1508.370; that if corrections are made on this account, far from being any shortage of the raw materials, the results show excess accountal of raw materials to the extent of 152.44 Kgs. Finally, he submitted that no penalty is imposable on any of the appellants; that as the entire duty has been paid by the Appellant Company, no penalty is imposable as held by the Larger Bench of the Tribunal in the case of CCE, Delhi-III v. Machino Montell (I) Ltd. [2004 (168) E.L.T. 466 (T-LB)]; that no penalty is imposable on Shri Deepak Kumar Arya as no evidence has been adduced by the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ials, in fact according to him the raw materials is in excess and there is no evidence of whatsoever regarding manufacture of any quantity of quiwam in excess and its clandestine removal without payment of duty. These submissions made by the learned Advocate are well founded. The shortage of glass bottles has been worked out, allowing an uniform damage/breakage discount of 2%. There is no basis for taking the breakage @ 2%. The statement of Shri Arya is silent about the general percentage of breakages of glass bottles. No statement of any other person seems to have been recorded as no statement other than that of Shri Arya has been relied upon by the Revenue. Neither the statement of Shri K.N. Mehrotra, Manager, who was present throughout t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terials to only 94.940 Kgs. The appellants have also claimed that the quantity of semi-finished goods taken in Annexure B was less than the actual quantity. Thus the Revenue has not been able to establish shortage of raw materials as well as glass bottles. 7. The learned Advocate s contention that shortage of empty glass bottles by itself cannot lead to the conclusion that such bottles were used to clear clandestinely quiwam is well founded. No material has been brought on record by Revenue either by way of statement of any labour/worker in the factory or by way of statement of any customer who has purchased the excess quantity alleged to have been cleared by them without payment of duty or by any other material. It has been held by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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