https://www.taxtmi.com/caselaws?id=106461 Central excise duty cannot be demanded solely from shortage of raw material unless there is independent evidence of actual clandestine manufacture and removal of the finished goods. Here, only a shortfall in molasses was established; there was no shortage of finished product, no admission by any responsible functionary, and no material showing that the raw material deficiency was converted into denatured ethyl alcohol and cleared without duty. The inference of clandestine production was therefore arbitrary and subjective. Proceedings could at most relate to the raw material shortage itself, but the duty demand and penalty based on a hypothetical assumption of manufacture and clearance were set aside. en-us Thu, 25 Jul 2002 00:00:00 +0530 Wed, 14 Mar 2012 12:23:42 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=106461 Central excise duty cannot be demanded solely from shortage of raw material unless there is independent evidence of actual clandestine manufacture and removal of the finished goods. Here, only a shortfall in molasses was established; there was no shortage of finished product, no admission by any responsible functionary, and no material showing that the raw material deficiency was converted into denatured ethyl alcohol and cleared without duty. The inference of clandestine production was therefore arbitrary and subjective. Proceedings could at most relate to the raw material shortage itself, but the duty demand and penalty based on a hypothetical assumption of manufacture and clearance were set aside. Case-Laws Central Excise Thu, 25 Jul 2002 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=106461