TaxTMI 
TaxTMI 
1993 (7) TMI 190
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....eld to have been manufactured and clandestinely removed has been worked out on the basis of shortage of reclaimed rubber which is used as one of the raw materials. Statements were recorded from the employees of the appellants and the ratio in which various raw materials were used for producing one batch of tread rubber was also ascertained and taking the percentage of the reclaimed rubber used, the quantification in respect of tread rubber held to have been manufactured and removed had been worked out. 2. The learned Consultant for the appellants pleaded that he is not disputing the fact that there was shortage of reclaimed rubber noticed when the authorities paid surprise visit to the factory. He pleaded that the lower authority merely on....
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....s have given explanation for the shortage and the Department has made enquiries in this regard. Out of a lot of 1500 Kgs of reclaimed rubber about 1000 Kgs were returned to the supplier of the rubber as the same was not of desired quality and he pleaded that the supplier had also confirmed the same. He pleaded that in view of this, in the absence of any other corroborative evidence on record, manufacture and clandestine removal could not be established and the lower authority was in error in penalising the appellants. 3. The learned DR reiterated the finding of the lower authority in his order. 4. We observe that in the present case on check of the raw material in the appellants' factory certain discrepancies were found on physical verifi....
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....". On going through the records we find that Shri V. K. Thampy has given only one statement in a question & answer form on 26-9-1988 and he has answered the questions as were put to him. There is no specific query asked regarding shortage noticed and the reasons therefor. There is however a letter dated 26-9-1988 addressed to the Supdt. Headquarters Preventive, Cochin by Shri Thampy wherein he has taken a plea that out of the lot of 1500 Kgs reclaimed rubber which was bought from M/s. United Trading Agency, Ernakulam, 1000 Kgs were returned on 21-9-1988 for exchange and the return of the rubber had been acknowledged by M/s. United Trading Agency and the said exchanged material were yet to be received and the shortage had been attributed to....