Contemporaneous admission of stock shortage sustains duty demand despite belated retraction and later witness affidavit.

Duty demand on shortage of finished excisable goods found during stock verification was sustained because the panchnama and the director's contemporaneous statement recorded the shortage, and that admission was not retracted promptly. A later witness affidavit filed at the first appellate stage was treated as belated and insufficient to displace the contemporaneous record. The subsequent denial of shortage was viewed as an impermissible late retraction, so no additional evidence was required to confirm the duty demand on the admitted shortage.

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Issues: Whether the demand of duty on the shortage of finished excisable goods found during stock verification was sustainable, and whether the assessee's challenge to the panchnama and the belated explanation/retraction could defeat the demand.

Analysis: The stock verification was conducted in the presence of the company's Director and independent witnesses, and the shortage was recorded in the panchnama. The Director acknowledged the shortage in his contemporaneous statement and did not retract it. The later affidavit of one witness was produced belatedly at the first appellate stage without prior foundation, and there was no sufficient reason to displace the contemporaneous record. The subsequent plea that there was no shortage was treated as a belated retraction, which could not override the earlier admission. In these circumstances, no further evidence was required to sustain the duty demand on the admitted shortage.

Conclusion: The demand of duty was rightly confirmed and the assessee's challenge failed.

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