2018 (3) TMI 182
X X X X Extracts X X X X
X X X X Extracts X X X X
....fferent investigations undertaken for different periods. The impugned order has disposed of show cause notices dated 28.03.2013 as well as 30.06.2014. 4. During the period 05.06.2012 to 12.06.2012, Central Excise Officers visited the appellant's factory and carried out a thorough verification of the stock of inputs as well as finished goods in the factory of the appellant. During this period, the production and clearances in the factory continued but were thoroughly supervised by the Central Excise Officers. In the initial stock taking held on 05.06.2012, the panchnama recorded that against total stock of 10703.714 MT of TMT bars, the total physical stock was 9648.139 MTs, leading to a shortage of 1055.575 MT. The duty involved in such shortage detected was paid by the appellant soon thereafter. After continuing the stock verification on 11.06.12 and after recording the statement of various connected officials of the appellant, the department in the show cause notice dated 28.03.2013 alleged that there was a shortage of "Buland" brand TMT bars to the extent of 9076.766 MT. It was further alleged that this quantity of finished products were cleared clandestinely without payment of d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s arising out of high burning loss. It is his submission that burning loss varies from 15% to 20% in respect of M.S. Ingot whereas in respect of TMT bars which is 3% to 5%. The huge shortage detected has been explained by the Director as accumulated burning loss. (iii) Simply on account of shortage of various goods, it cannot be alleged that such goods have been clandestinely cleared. The department has not carried out any corroborative investigations on aspects such as the power used, procurement of raw materials etc. In the absence of such investigation, such huge amount of demand cannot be sustained. He also relied on various case laws. 8. Ld. AR appearing for the Revenue justified the impugned order. He submitted that the stock verification, in respect of both the investigations have been conducted in the presence of the representative of the appellant who has expressed satisfaction in the method adopted for such verification. In the absence of satisfactory explanation for the shortage, the appellant will be liable to pay the excise duty on such finished products found short. 9. We have heard both sides and perused the appeal record. 10. Both investigations leading to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stigation has been undertaken by the Revenue. It is pertinent to record that details of the buyers in such cases were found in the letter paid which could have been investigated but the same has not been done. 14. It is clearly well settled that allegation of clandestine removal of finished goods cannot be sustained only on the basis of mere shortage. In this regard, we reproduce below the observation of the Punjab & Haryana High Court in the case of CCE&ST, Ludhiana vs. Anand Founders & Engineers - 2016 (331) ELT 340 (P&H). "6. The Commissioner (Appeals) set aside the findings of the clandestine removal of the goods recorded by the adjudicating authority by holding that the assessee's record which were admittedly lying in the adjoining sister concern M/s Adhunik Industrial Corporation were not scrutinised. Further, it was held that the assessee had clarified the stock position vide letter dated 9.8.2008 which was rejected summarily as an after-thought without making the verifications. Shri Kamal Kant in his statement has admitted only shortages and not the fact of clandestine removal and there was no evidence to show the clandestine activities as no further investigation was co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Court observed as follows- "12. Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. On careful examination, it is found that with regard to alleged removals, the department has not investigated the following aspects: (i) To find out the excess production details (ii) To find out whether the excess raw materials have been purchased. (iii) To find out the dispatch particulars from the regular transporters. (iv) To find out the realisation of sale proceeds. (v) To find out finished product receipt details from regular dealers/ buyers (vi) To find out the excess power consumptions. 13. Thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department. 14. In the instant case, no investigation....