TMI Blog2001 (1) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... n the manufacture of tiles from out of polished slabs, wastages take place. Appellants maintain R.G.1. Registers in relation to unpolished slabs, polished slabs, tiles and wastages that were generated while making tiles. At the relevant period concerning the issue in this appeal, appellant was not maintaining R.G.1. Registers for wastages, which were generated at the stage of polishing the cut slabs. The wastage generated at that stage as well as the wastage obtained in the course of manufacture of tiles, were dumped in the premises of the factory. RG1 Register was prepared only in relation to the wastage generated in the course of the manufacture of tiles. 3. On 6-10-1994, officers of the Central Excise Department conducted stock verific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en pieces may be such that it may not be possible to manufacture tiles from them. They will have to be discarded and thrown out. They were, in fact, thrown to the compound of the factory. The wastage so generated while handling the unpolished or polished slab was not being entered by the appellant in the RG1 Register as wastage. It is his further case that the breakage at this stage was not recorded in any register by the employees who were engaged in polishing the slabs, because they were paid at piece rate. If the breakage is recorded, it will go to reduce their salary. The fact remains that there occurred wastage in the process of polishing the slabs. The broken slabs were in the compound. Those slabs wore not taken into consideration by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g was never recorded in any register. Wastage generated at the time of manufacture of tiles alone was noted in the RG1 Register. On account of the absence of a register regarding the wastage generated in the course of polishing the unpolished slabs, deficiency in the stock occurred. This deficiency was the one found out by the officers while they made physical verification on 6-10-1994. 7. On 6-10-1994 when physical verification was conducted by the officers, Panchnamas were prepared. Witnesses who attested the Panchnamas were cross-examined in the proceedings initiated pursuant to the show cause notice. One witness was asked as to how the officers ascertained the stock position. His reply was that the officers ascertained the stock avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n further questioned whether he did take note of the broken tiles found in the premises while preparing the Panchnama, he gave the reply : "Only the finished goods of all the category mentioned in the Panchnama were taken into account as shown by the company's representatives." 9. Without actually verifying the total quantity of waste lying in the premises of the factory, the officers have assessed the shortage to be to the tune of 7917.1598 sq. metres. This shortage, as per the show cause notice, is spread over for the period from January, 1992 to 5th October, 1994, i.e. for about three years. Annual production of polished granite slabs by the appellant has been found to be to the tune of 52,871.7612 sq. metres. For nearly three years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oken polished granite slabs and tiles found lying in the premises were never taken into consideration in fixing the actual stock in the factory. 12. In view of what has been stated above, we hold that the Department has miserably failed in establishing the fact that 7917.1598 sq. metres of polished granite slabs were clandestinely removed from the factory premises. We set aside the finding arrived at by the Commissioner. 13. The second point urged by the learned Counsel representing the appellant was that the Commissioner did not fix the value of the quantity of the polished granite slab alleged to have been not properly accounted for. The Commissioner fixed the cost of granite slabs at Rs. 1314.65 per sq. metre. To this price he added ..... X X X X Extracts X X X X X X X X Extracts X X X X
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