TaxTMI 
TaxTMI 
1994 (5) TMI 103
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....ntities of materials detected at the time of stock-taking conducted in their factory on 19-12-1987. 2. Shri P.K. Das, learned Counsel for the Appellants stated that there was actually no shortage as alleged. A certain quantity of substandard material had to be removed for reprocessing which was inadvertently not entered in the record. The matter could not be properly explained by the inexperienced clerk at the time of stock-taking. Their explanation in this regard was rejected only on the ground that it was not offered immediately but after a lapse of time. In fact, the Department's letter itself was issued as late on 11-7-1989. In this connection, Shri Das cited the decision of Bombay High Court in J.G. Vacuum Flasks Ltd. v. Union ....
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....nufactured. The shortage was noticed on 19-12-1987 by the stock-taking Officer and it was authenticated by the Appellants' Representative on the Stock-taking Report itself. The reasons for the shortage should have been given at that time. On this reasoning the Additional Collector has observed that their bona fide was not clear. They had advanced the explanation on 18-6-1990, long after the date of stock-taking. Holding that the reasons given for discrepancy were not satisfactory, he confirmed the demand under Rule 223A of the Central Excise Rules besides imposing the penalty of Rs. 500 under the same provisions. 6. I have perused the decisions cited by both the sides. The JK Vacuum Flasks case decided by Bombay High Court is not re....
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....not under Section 11A of the Central Excises and Salt Act as a short levied or non-levied duty but as a demand in terms of Rule 223A for goods not accounted for. Though there are decisions particularly at the highest level of the Hon'ble Supreme Court also, that where the statute does not provide for a time limit for issue of notice, a reasonable time limit will have to be applied, such reasonable time limit will have different connotations in different situations. Even Section 11A of the Central Excises & Salt Act has two spans of time limit, one upto six months and the other beyond six months but not exceeding five years depending upon whether the short-levy is under normal circumstances or due to specific reasons like wilful misstatement....
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....tion as they cover and deal with altogether different situations and serve different purposes and object. 8. Rule 223A provides that unless the deficiency disclosed in stock-taking is explained to the satisfaction of the proper Officer, the manufacturer shall be liable to pay the full amount of duty chargeable on such deficiency subject to due allowance for waste by evaporation or other natural causes. In the present case, the deficiency was not properly accounted for at the time of stock-taking. The explanation tendered at a later stage was not considered acceptable by the adjudicating authority. There is no other explanation at this appellate stage. Respectfully following the Hon'ble Madras High Court judgment, I hold that the dem....