TMI Blog2015 (12) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... t they intend to shift the same to other 100% EOU. UTL which is adjacent to premises of UL. This letter bears the stamp of the office of the Asstt. Commissioner and the receipt of this letter as such is not disputed. It is also seen that on 16.06.2000, the statement of Shri D.K. Kothari, General Manager had been recorded under Section 14 of the Central Excise Act, 1944 and on being questioned about shortage, had stated that this yarn has been shifted to another godown, as the yarn was damaged and moth eaten and as such, it is not the shortage. As regards the shortage of 1.603 MTs. of wool waste, this shortage is not denied and the explanation given by the appellant is that the same may be due to wrong recording of weight of the wood wast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted by the jurisdictional central excise officers from 13.06.2000 to 16.06.20000 and the similar stock taking of the stock of raw materials and finished goods in respect of UTL was conducted on 17.06.2000. In course of stock taking of UL a shortage of 73.904 MTs. was found in the stock of All wool worsted Yarn. The duty involved on the yarn found short was ₹ 64,14,172/-. Besides, this, was also shortage of 1.6 MT of wool waste on which the duty involved was ₹ 12,564/-. The stock taking had been conducted under Panchnama and the shortage was duly noted in the Panchnama. However, in course of stock taking of UTL on 17.06.2000, stock of wool yarn of 73.904 MTs was found in excess of their recorded balance. 1.2 At the time of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und in the factory of UL almost matches with the excess quantity found in the godown of UTL that the appellant in this regard under their letter dated 5.4.2000 addressed to the Dy./Asstt. Commissioner, Central Excise, Raipur had informed that they had identified and sorted out approx. 75 MT of the moth mildew affected finished goods (substandard quality consisting of All Wool Yarn, Poly Wool Yarn and other mix Yarn) and decided to keep it separately, so that other yarn do not get affected and spoiled, that this letter had been received in the office of the Asstt. Commissioner, as is clear from the record of the office of the Asstt. Commissioner and that besides this, Shri D.K. Kothari, General Manager of the Unit on being questioned about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight and that in view of this, the impugned order is not correct. 4. Shri M. S. Negi, ld. Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner in the impugned order and pleaded that while in the Unit of UL shortage of 73.904 MTs. was in respect of All Wool worsted yarn, All wool dyed yarn, Poly wool worsted yarn, poly wool dyed yarn, wool silk yarn and wool silk dyed yarn, etc. and there was absolutely no remark in the RG-1 Register about this yarn being damaged or moth and mildew affected, that the yarn found in the premises of UTL was mainly mixed yarn and hence, the appellants plea that the goods found short in UL had actually been shifted to UTL and as such the shortage alleged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. It is not disputed that the factory of UL and the factory of UTL, both 100% EOUs, are located in the same compound. In this appeal, we are concerned with the alleged shortage in the factory of UL which was detected in the course of stock taking done from 13.06.2000 to 16.06.2000. According to the Department, there was shortage of 73.904 MTs. in the stock of various yarns and shortage of 1.603 MTs. in the stock of wool waste. The allegation of the Department is that this quantity of yarn and waste has been clandestinely removed without payment of duty. The appellant s contention, however, is that while the shortage of 1.603 MTs. of wool waste is due to wrong recording of the weight as wool, being hygroscopic in nature, tends to gain w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yarn has been shifted to another godown, as the yarn was damaged and moth eaten and as such, it is not the shortage. We find that this statement of Shri D.K. Kothari has neither been relied upon in the show cause notice nor the appellant had been supplied a copy of the same and instead another statement dated 29.05.2001, which had been relied upon. Though in the reply to the show cause notice and at the time of personal hearing, the appellant had referred to the statement dated 16.06.2000 of Shri D.K. Kothari, General Manager and about their intimation dated 5.4.2000 to the Asstt. Commissioner, no finding had been given by the Commissioner in respect of statement dated 16.06.2000 of Shri D. K. Kothari. With regard to the letter dated 5.4.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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