TMI Blog2009 (5) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of mineral glasses (watch glasses), the finished goods of the assessee, for the period 1-10-1996 to 6-10-1996 showed production of 15838 pieces. The stock of mineral glasses ascertained by the officers was found to be short by 31987 compared to the RG-I figures and the PSS. Scrutiny of the RG-I register showed that for the months of October 1995, December 1995, January 1996 and July 1996 the production recorded in the RG-I was short by 43859 pieces as compared to figures in the PSS. The Form V register, accounting receipt and disposal of mineral glasses cleared on payment of duty was found to be written up to 23-8-96. The physical stock of returned mineral glasses showed shortage of 22796 pieces. A Show Cause Notice was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y after the stock taking by the officers was not acceptable. The shortage itself was enough proof for suppression of production and clandestine clearances of the same. As regards imposition of penalty under Section 11AC of the Act for the impugned transactions prior to 28-9-1996 he held that quoting of incorrect provisions of law could not help (assessee) escape punishment. Accordingly, he affirmed the order of the original authority. 2. The impugned order is assailed on various grounds. The following grounds have been raised in the appeal or submitted by the learned counsel for the appellants during hearing. The appellant s consistent claim has been that the stock position had not been ascertained correctly. PSS did not indicate producti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral glasses available on the date of their visit considering that these goods were small, thin and fragile and were over 7.65 lakhs in number as ascertained. The demand for duty on the charge of clandestine clearances was not sustainable. Penalty imposed under Section 11AC for offences prior to 28-9-1996 when the said section was enacted was also not sustainable. It is prayed that the impugned order may be set aside. 3. We have also heard the learned SDR who has defended the demand and penalties. 4. We have carefully considered the facts of the case and the rival submissions. We find that the Show Cause Notice had alleged shortage of a quantity of mineral glasses, on the date of visit by the officers. The appellants have consistently de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no evidence for this finding. The lower authorities have not recorded if the RG-I stage of the impugned goods is before the process of manufacture including keytone wiping is complete. There is no reliable evidence that the figures recorded in the production summary sheets represented the final figures of the finished goods accounted in the RG-I register. The assessee had claimed that production figures were entered in the RG-I after Finished Goods Notes were prepared from PSS. Goods suffered damage due to natural causes and breakage. These arguments have not been found to be incorrect. We find that, in any case, in order to demand duty on a finding of clandestine removal of excisable goods there has to be reliable evidence. The Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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