https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=115255 https://www.taxtmi.com/caselaws?id=115255 Demand of duty - Clandestine removal - Shortages of raw material - manufacture and removal of the final product - Penalty - Burden of proof - HELD THAT:- We find that shortages of rolls found was 989.745 kgs. This shortage, the appellants had not been able to explain by offering any cogent and convincing explanation. Therefore, in our view, it has been rightly inferred that the Pan Masala was clandestinely removed without payment of duty by the appellants after packing the same in these rolls. Therefore, the impugned order in this regard is affirmed. However, the quantum of duty will be worked out in respect of these rolls, by the Department which will be payable by the appellant-company. The documents showing payment by them as job work charges to that firm had been also produced by them. They had even produced the statement of the bank account of that firm to prove that the payment made by them was credited to their account. In the face of these documentary evidence, it is difficult to accept the plea of the Revenue that the firm, M/s. Gopal Grinding Industry did not exist. From mere non-cooperation of that firm, no inference could be drawn against the appellants that they had, in fact, manufactured the final product, Pan Masala, out of that Supari and removed it in a clandestine manner without payment of duty. Shortage of Katha, Cardamom, Tobacco, as detailed in the impugned order, has been duly explained by the appellants. This shortage, according to them, was due to the natural waste during the manufacture of the Pan Masala. The wastage claimed by them of Cardamom is 30%, Supari 10% and Katha 1%. The duty demand has been calculated on the basis of shortage of each of the above referred raw material separately, whereas even after mixing these raw materials, the final product, Pan Masala, could hot be manufactured as other raw material was also required regarding which neither any shortage nor any excess was found in the factory. There is also no evidence on the record to prove the excess receipt of raw material by the appellants, excess consumption of energy, excess employment of labour by them for manufacture of the excess Pan Masala. There is also no evidence on the record to prove the excess receipt of raw material by the appellants, excess consumption of energy, excess employment of labour by them for manufacture of the excess Pan Masala. No evidence, whatsoever has been collected to prove the clandestine sale/clearance of the goods of Pan Masala by the appellants in the market to various buyers. No statement of any buyer to whom the Pan Masala was sold during the period in dispute nor of the transporter who transported the goods from the factory premises of the appellants to the place of the buyers had been brought on record. Thus, the impugned order accordingly stands modified. The duty in respect of 989.745 kgs. of rolls which will be worked out as per law by the Department is confirmed against the company, appellant No. 1, with penalty of Rs. 50,000/-, while the impugned order confirming the rest of the duty with penalty is set aside against the appellant no. 1. Similarly, the penalties on other appellants no. 2 3 are set aside. The appeals stand disposed of in the above terms. Case-Laws Central Excise Thu, 07 Apr 2005 00:00:00 +0530