2017 (6) TMI 315

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..... Bhura, from Rs. 71,893/- to Rs. 25,000/-. 2.1 Brief facts of the case are that:- (i) the department conducted preventive checks on the appellant-assessee unit where finished goods as per daily stock register were declared as 5019 Kgs whereas physically the goods were found to be 4000 Kg. only. Thus, there was shortage of 1019 Kg of finished goods which was accepted by the Director of the Company, Shri Surendra Kumar Bhura saying that shortage was due to negligence of the staff. (ii) The appellant-assessee voluntarily paid the duty for the shortages found. (iii) The department vide order-in-original confirmed the demand of Rs. 71,893/- along with equivalent penalty on the appellant-assessee, and equivalent personal penalty on Shri Surend .....

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..... when there is no retraction of the statement made by the Director, the liability of duty on said shortage cannot be reversed. 4.3 The Revenue has imposed equivalent penalty on the assessee-appellant under section 11AC of the Central Excise Act. Section 11AC of Central Excise Act call for imposition of equivalent penalty in the cases involving fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the Rules made thereunder with an intent to evade payment of duty. This is a serious charge, but there are not enough evidences to corroborate, establish and prove that the assessee resorted to fraud, collusion, willful mis-statement or suppression of facts or contraventio .....

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..... ly. It is clarified by the learned Advocate for the appellants that there is no retraction of the statement given by the representatives of appellants and that there is no refund claim filed by them. The obligation to account for the finished goods manufactured by the appellants is a strict obligation. In the absence of discharging the said obligation the duty is demandable and the same stands already paid. At this stage, they cannot be allowed to raise the dispute about the duty demand and the interest liability. However, the allegation of clandestine removal is a serious one. Every case of shortage cannot be presumed to be a case of clandestine removal. The charge of clandestine removal requires to be established by proper investigation. .....

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