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2016 (2) TMI 450 - CESTAT NEW DELHI

2016 (2) TMI 450 - CESTAT NEW DELHI - 2015 (329) E.L.T. 947 (Tri. - Del.) - Shortage of inputs as well as finished goods - Demand of duty along with interest - Penalty imposed - Held that:- Weighment of stock has been done on the basis of averages of the stocks found in the factory during the course of investigation. In appellant’s own statement although the duty has been paid but reasons for shortages has been explained by the appellant that shortage might be the reason that the weighment has b .....

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COURT ) has held that the shortage without any evidence of clandestine removal cannot lead to inference to evasion of duty. Therefore, as in this case Revenue has not come with any evidence which can lead the goods have been cleared clandestinely. Merely on the basis of stock taking on average basis the allegation of clandestine removal of goods is not sustainable. With these observations, hold that stock taking done on average basis is not a correct method. Consequently, the allegation of shor .....

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nished goods. Penalty was also imposed. 2. The facts of the case are that the appellant is manufacturer of MS Ingots. On 12-11-2008 at about 10.30 am the factory of the appellant was visited by the Revenue officers and the appellant was asked to arrange for weighment of stock and it was agreed that stock be weighed on the basis of average of finished goods as well as inputs. On the basis of average method shortage of 2.815 MT of MS Ingots, 7.59 MT of runners and risers and 40.075 MT of spon .....

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unsel for the appellant submits that during the course of recording the statement, appellant itself had explained the reasons for shortages is that the weighment has been done on average basis. Therefore, there may be a variation in the weighment. Revenue has not come up with any corroborative evidence to allege that the short found of input/finished goods were due to clandestine removal of the goods. Therefore, demand against the appellant is not sustainable. To support his contention he relied .....

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