Stock shortage duty demands require consideration of Board loss guidelines before quantification and confirmation of liability.

Where duty is proposed on alleged clandestine removal arising from stock shortages, the adjudicating authority must first consider applicable Board circular guidelines on loss percentage and the material placed by the assessee before quantifying liability. Failure to do so renders the determination incomplete. The impugned order was set aside and the matter remanded for de novo adjudication after hearing both parties. The question of limitation was left open.

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Issues: Whether the demand of duty based on alleged clandestine removal and stock shortage could be sustained without first considering the loss percentage prescribed in the Board's circular and the other material placed before the adjudicating authority.

Analysis: The authority recorded that the assessee was alleged to have clandestinely removed goods on the basis of shortages found during stock taking. It was found that the Board's circular prescribing percentage guidelines for determining loss had not been considered by the adjudicating authority while quantifying shortages and duty. As the circular and the related submissions were relevant to a proper determination of the stock position and duty liability, the matter required fresh adjudication after giving the parties an opportunity of hearing. The question of limitation was not decided and was left open.

Conclusion: The impugned order was set aside and the matter was remanded for de novo adjudication in the light of the Board's circular and the other submissions of the parties.

Ratio Decidendi: Where quantification of duty depends on stock shortage, the adjudicating authority must consider applicable Board guidelines and relevant submissions before confirming duty.

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