1999 (4) TMI 286

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....d confiscated excess stock of finished goods valued at Rs. 7504/- involving duty liability of Rs. 1501/-, with option to redeem the same on payment of fine of Rs. 1500/-. (b) confiscated finished goods valued at Rs. 98,574/- seized at the time of visit, which the assessees claimed as rejected goods returned by the customers, with option to redeem on payment of a fine of Rs. 25,000/-; (c) confirmed an amount of Rs. 19,98,179/- under Rule 57(1) on shortage of inputs on which Modvat credit had been availed and (d) imposed a penalty of Rs. 2 lakhs under Rule 173Q of the Central Excise Rules, 1944. 2. We have heard Shri J.P. Kaushik, learned Counsel and Shri D.K. Nayyar, learned DR and record our findings on the i....

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....here is no corroborative evidence to establish clandestine removal and therefore, we hold that the Department has not discharged the burden of proving clandestine removal of final products. We therefore, set aside the duty demand on finished goods found short and set aside the confiscation of excess stock of finished goods. (II) Finished goods claimed to be rejected goods : The appellants have stated that defective goods were sent back to their factory and they were not capable of being repaired and hence they were mutilated and converted into scrap which was being cleared on payment of duty. They have categorically stated that the Original Equipment dealers were returning defective items to them and dealers were replacing the defective ....