Stock shortage evidence and admission sustained liability, but excessive personal penalty was reduced on the facts.

Shortages of raw material and finished goods found on stock verification were treated as established because the partner of the appellant admitted the shortages and voluntarily debited the duty amount, so the objection that no physical verification was carried out was rejected. The only interference made was on quantum: the personal penalty was considered excessive on the facts and reduced from Rs. 50,000 to Rs. 25,000, while the impugned order was otherwise upheld.

---

---

Issues: Whether the finding of shortages in raw material and finished goods called for interference with the penalty imposed on the appellants.

Analysis: Shortages of raw material and final product were found on stock verification. The partner of the appellant company admitted the shortages and voluntarily debited the duty amount. In these circumstances, the contention that no physical verification was carried out was rejected. However, the quantum of personal penalty was considered excessive on the facts and circumstances of the case.

Conclusion: The penalty was reduced from Rs. 50,000/- to Rs. 25,000/-, and the impugned order was otherwise upheld.

---