TMI Blog2015 (2) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of defective quality of the inputs i.e. sponge iron supplied by the supplier of the goods. For which, the demand of ₹ 9086.00 was proposed to be confirmed against the appellant. Both the lower authorities confirmed the demand against the appellant along with interest and penalty on both the appellants have been imposed. Aggrieved from the said orders, the appellants are before me. 3. The ld. Counsel for the appellants submit that the stock taking was done on average basis and it was not done physically as it is coming out from the panchnama itself. Therefore, it cannot be alleged that there was a shortage of finished goods. Moreover, the shortage alleged by the department works out to 8-8.5% only. If the stock taking would ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of that method, the weighment was done and no explanation for shortage has been given. Therefore, relying on the decision of this Tribunal in the case of JC Rolling Mills Pvt. Ltd.Vs. C.C.E. Kanpur-2012 (276) E.L.T. 254 (Tri-Del) the duty is payable by the appellant. He further submits that in the case of Bajrang Petro Chemicals Pvt. Ltd. Vs. C.C.E. Kanpur-2014-TIOL-2254-HC-ALL-CX, Hon ble High Court it was held that in such a situation penalties on both the appellants are imposable. 6. Heard the parties. Considered the submission. 7. It is the case wherein shortage of finished goods was found on the basis of average weighment of MS Ingots as stated in the panchnama. Average basis counting of the MS Ingots was done and there after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had admitted shortage and paid the duty and had not explained any suitable explanation for the shortage of finished goods, in that scenario it was held by the Hon ble High Court that it is the admission by the appellant that goods found short have been removed without payment of duty. But the facts of this case has no relevance to the facts of that case as in that case the huge shortage was found during the course of physical verification of the finished goods. Therefore, the said facts are not relevant to the facts of this case. Further, I find that in the case of Durga Steel Rolling Mills (Supra) wherein the shortage was found on average basis, this Tribunal observed that in such a scenario when physical counting of the goods has not take ..... X X X X Extracts X X X X X X X X Extracts X X X X
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