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of <h1>Tribunal rules in favor of appellant, setting aside duty confirmation and penalties for raw material shortages.</h1> <h3>MICROSYNTH FABRICS (INDIA) LTD. Versus COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, VAPI</h3> The Tribunal ruled in favor of the appellant, setting aside the duty confirmation and penalty imposition for shortages in raw material. It found the ... Demand and penalty - Clandestine removal of raw materials Duty had initially been confirmed against the appellant for shortages in raw material detected on physical verification; RG-23A Part-I entries up to 1-12-1999 showed discrepancies while the company relied on Material Issue Notes, which the Adjudicating Authority treated as possible 'afterthought' and the shortages as 'notional shortage.' The appellant contended the Material Issue Notes proved issuance for production and, absent evidence of clandestine removal, the demand/penalties were unjustified. On review, the Tribunal found that, if Material Issue Notes are taken into account, the shortages amount to only 0.34% and 0.95%, 'within the range of permissible tolerance.' There was no other evidence of clandestine clearance. Reliance on precedent (M/s. IOC Ltd. v. CCE) supported that a duty demand on such stock shortages is not justified. The impugned order confirming duty and imposing penalties was set aside and the appeals allowed with consequential relief to the appellant.
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