Tribunal dismisses appeal, upholds Commissioner's order on finished goods shortage.

The appeal was dismissed by the Tribunal as it found no fault in the Commissioner (Appeals) order setting aside the demand for shortage of finished goods. The physical verification was done on an average basis, resulting in a total shortage of 1.09% of the total stock, which was not disputed by the Revenue. There was no evidence to show that the cleared goods found short were done so without payment of duty. The Cross-objections filed by the respondents were disposed of accordingly.

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Issues involved:
Appeal against Order-in-appeal setting aside demand for shortage of finished goods.

Analysis:
The appeal was filed by the Revenue against the Order-in-appeal passed by the Commissioner (Appeals) setting aside the demand for finished goods found short. The Revenue contended that there was a shortage of finished goods on the date of visit, and duty was rightly demanded based on physical verification conducted in the presence of the respondents' authorized signatory, who admitted the shortage and signed the Panchnama. However, the respondent argued that the weightment was done on an average basis, specifically mentioning in the Panchnama that physical verification was based on counting the number of channels/angles to calculate the total weight. The total shortage was 1.09% of the total stock, attributed to the calculation method.

In this case, the physical verification of goods was indeed done on an average basis, counting the channels and angles to arrive at the total weight based on average weight of each size. The total variation was 1.09%, not disputed by the Revenue. No evidence existed to prove that the cleared goods found short were done so without payment of duty. With a total stock of 2807.535 MT and a shortage of only 30.5 MT calculated on an average basis, the Tribunal found no fault in the Commissioner (Appeals) order. Consequently, the appeal was dismissed, and the Cross-objections filed by the respondents were disposed of accordingly. The judgment was dictated and pronounced in open court.

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