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2016 (6) TMI 1014 - CESTAT MUMBAI

2016 (6) TMI 1014 - CESTAT MUMBAI - TMI - Clandestine removal of goods - figures of stock reported in their financial accounts (3 CD Returns) filed with the Income Tax authorities were different from stocks reported in their RG-1 register. - no stock verification has been done nor any evidence of clandestine clearance has been recorded. - Held that:- The entire case has been booked on the mismatch between the figures reported in 3CD returns filed with Income Tax authorities and the RG-1 register .....

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cal ) Shri H.G. Dharmadhikari, Advocate with Shri D.A. Bhalerao, Advocate for the Appellant Shri S.V. Nair, Supdt. (AR) for the Respondent ORDER Per Raju The appellants, M/s Lubrizol India Pvt. Ltd., are manufacturer of certain chemicals. During the audit conducted by Revenue, it was noticed that the figures of stock reported in their financial accounts (3 CD Returns) filed with the Income Tax authorities were different from stocks reported in their RG-1 register. A show-cause notice was issued .....

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ppeal before this Tribunal. 2. Learned Counsel for the appellant argued that the financial records are made as per the principles of accounting laid down by the ICAI. It was argued that so far as RG-1 register is concerned, the entry of stock in the same are made only after the goods are checked and verified after quality inspection and are ready for dispatch. He argued that criteria for considering the stock as finished goods are different for the financial accounts and for the Central Excise l .....

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ty and scrap quantity are part of the excess inventory in comparison with RG-1 stock and the said has been presumed as shortages by the Department and wrongly demanded the duty without establishing the removal of goods. Moreover, for the same period in the earlier show-cause notice No. V/Adj/SCN/15/121/Commr/03/Bel/1894 dated 27.3.2003, the Department has demanded the duty on 339MT, which is the difference between the Physical inventory and the stocks reflected in financial books of Accounts and .....

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tances, no demand of duty can be made. He also pointed out that the shortage pointed out was less than 1% of the volume manufactured during the year. He especially relied on the decision of the Tribunal in the case of Shree Precoated Steel Pvt. Ltd. 2000 (124) ELT 531 (Tri), which was affirmed by the Hon'ble Apex Court as reported in 2001 (131) ELT A153 (SC). He further pointed out that at no stage, Revenue had done any physical stock taking of the goods. 3. Learned AR relies on the impugned .....

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no stock verification has been done nor any evidence of clandestine clearance has been recorded. The entire case of Revenue is based on the mismatch between 3CD returns submitted by the Income Tax authorities and the RG-1 register maintained by the appellant under the Central Excise law. The Tribunal In the case of Shree Precoated Steel (supra) has observed as follows: - The form 3CD which is required to be filed to the Income-tax Department is statement of the record showing semi-finished and f .....

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