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of <h1>Tribunal overturns duty demand and penalty, ruling in favor of appellant.</h1> <h3>M/s Jawala Fastness Pvt Ltd Versus C.C.E & S.T. Ludhiana</h3> M/s Jawala Fastness Pvt Ltd Versus C.C.E & S.T. Ludhiana - TMI Issues:1. Can duty be demanded on the raw material found short during the course of investigationRs.2. Can duty be demanded on shortage of finished goods found during the course of investigation without further investigationRs.Analysis:Issue No. (i):The appellant contested the demand of duty on shortage of raw material, arguing that as per Section 3 of the Central Excise Act, duty is payable only on goods manufactured by the assessee. Since the raw material was not manufactured by the appellant, no duty can be demanded on its shortage. The Tribunal supported this argument, citing a similar case where it was held that duty cannot be demanded on raw material that is not manufactured goods. Therefore, the demand of duty on the shortage of raw material was set aside.Issue No. (ii):Regarding the shortage of finished goods, the appellant explained that the shortage was due to the issuance of invoices on the same day as duty payment. However, no further investigation was conducted by the Revenue. The Revenue failed to provide evidence on how they calculated the price of the finished goods, and the appellant's explanation was not disputed before the show cause notice. Considering these factors, the Tribunal found that the duty paid by the appellant was correct. Additionally, the Tribunal emphasized that without further investigation, penalty cannot be imposed, citing a decision by the jurisdictional High Court. Consequently, the penalty imposed on the appellant was set aside, and the impugned order was overturned, allowing the appeal with consequential relief.In conclusion, the Tribunal ruled in favor of the appellant on both issues, setting aside the demand of duty on raw material shortage and overturning the penalty imposed on the shortage of finished goods due to lack of further investigation.
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