TMI Blog2021 (6) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... loss depending upon the various factors and failure by them to record the actual burning loss, as the production is recorded on the estimate basis, whereas the sale of finished goods is recorded on actual weight basis. The appellant also manufactures M.S. Billets, for which M.S. Ingots is the raw materials, in such process also there is burning loss. Thus, the explanation given by the appellants for the apparent shortage is held to be plausible, as the same has been rejected summarily by the Department without reference to the books of accounts and other records maintained by the appellant - further, there is no other corroborative evidence brought on record with respect to the allegation of clandestine removal, which is a serious charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing upon the quality of the raw materials and another factors. That during the period of dispute 2012-2013, the factory of the appellant was visited by the officers of the Excise Department on 5.6.2012. The stock verification was done and a panchnama was drawn. The stock verification was done mainly on the estimation basis. For verifying their stock of ingots, the average weight of ingots was assumed based on the size (without measuring) and the same was multiplied by the number of pieces in the stockyard. In this manner, shortage of 725 MT of ingots was worked out as compared with book stock. As per the panchnama, Shri D.R. Yadav, Manager and Authorised Signatory was present. Shri Yadav was asked to produce the records for verification, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 was issued as it appeared to Revenue that shortage found in stock has not been properly explained. Further, no proper documents have been produced with respect to the reasons given of burning loss, beyond their calculation. It appeared to Revenue that the appellant have removed such shortage clandestinely without issue of proper invoices and accordingly, it was proposed to demand the differential duty on the shortage of ₹ 29,12,365/-, with further proposal to appropriate from the deposit made along with interest and further penalty was proposed under Section 11 AC read with Rule 25, and also under Rule 27 of CER, 2002.Further, personal penalty was proposed on the Director, Shri Gurpreet Singh Chandok under Rule 26. 6. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the Director, Shri Gurpreet Singh Chandok. 8. Being aggrieved, the appellant preferred appeal before the Commissioner (Appeals) on the same grounds, which were taken in reply to the show cause notice and they also relied on several case laws for the proposition that for the apparent, shortage in stock, without any supporting evidence of clandestine removal, no adverse inference can be drawn. In support of their contention, the appellant relied upon the case in RA Castings Pvt. Ltd. 2009 (237) ELT 674 (Tribunal-Delhi) and CCE, Kanpur Vs. Meenakshi Castings Ltd. - 2011(274) ELT (Allahabd High Court) 9. The ld. Commissioner (Appeals) observing that shortage as worked out by the officers has not been disputed and further, the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one on 5.6.2012) was 34,306 MT. Thus, the shortage of 725 MTs is approximately 2% of the annual production during the immediate previous accounting year. Thus, the reason as stated by the Director in his statement under Section 14 as well as in the reply to the show cause notice, that the same is relatable to the discrepancy in recording the actual burning loss and /or due to recording of less burning loss is a plausible explanation given which has not been found to be untrue. It is a simple case of failure of the accounting system practised by the appellant resulting in recording of less burning loss than the actual, as the same was being recorded on estimated basis. 13. It is further urged that the Revenue have tried to cover-up the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 309) ELR 411 (All.) 15. It is further urged that in the facts and circumstances, the allegation of clandestine removal being unsubstantiated, the demand and penalty is fit to be set aside. 16. By way of alternative submission, it is urged that the cum-duty benefit for calculation of duty liability, should be allowed. Ld. Counsel also refers to the audit report by the Chartered Accountant, wherein with respect to the report in Form-3 CD for the accounting year ended March, 2013, at Sl.No.20 and 28 A, the quantitative details have been given with respect to the raw materials, process consumption and the production of finished goods and sales etc., wherein the yield has been stated at 75.05% , similarly for accounting year 2011-2012 in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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