Tribunal upholds duty demand for alleged clandestine removal of goods despite stock discrepancies

The Tribunal confirmed the demand for duty on alleged clandestine removal of finished goods and raw material based on discrepancies in stock levels, particularly with plastic pipes, despite stock taking being done on an eye estimation basis. The appellant's argument that the allegations were unsustainable was rejected, and duty was imposed along with a penalty for the proved shortages. However, for other goods where shortages were not proven due to the eye estimation basis, the demands were set aside, resulting in a partial disposal of the appeal.

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Issues: Alleged clandestine removal of finished goods and raw material; Stock taking based on eye estimation basis; Admissibility of shortage of goods; Imposition of duty, interest, and penalty.

In this case, the appellant appealed against an order confirming the demand for duty on alleged clandestine removal of finished goods and raw material. A search conducted at the factory premises revealed shortages of materials, leading to the initiation of proceedings against the appellant. The appellant contested the demand, arguing that stock taking was done on an eye estimation basis, making the allegations unsustainable. The appellant's counsel relied on a Tribunal decision to support this argument. The Revenue, however, contended that the appellant admitted shortages and paid duty, indicating clandestine removal. After hearing both parties, the Tribunal examined the investigation panchnama, noting discrepancies in stock levels, particularly with plastic pipes. Despite the eye estimation basis, the Tribunal found the charge of shortage and clandestine removal proved for plastic pipes, confirming a demand of duty and imposing a penalty. For other goods, where the Revenue failed to prove shortages due to the eye estimation basis, the demands were set aside. The appeal was disposed of accordingly.

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