TaxTMI 
TaxTMI 
2007 (2) TMI 512
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....removal and manufacture of Pharmaceutical Formulations on the basis of discrepancies between the Batch Manufacturing Report and credits in the Daily Stock Accounts. The period of dispute is from January, 1999 to November, 2001. The total amount involved is Rs. 19,26,861/-. Equal penalty has also been imposed. The appellants strongly challenge the impugned order. 3. Shri B.N. Gururaj, the learned Advocate who appeared for the appellants, urged the following points :- (i) The Preventive Officers visited the premises of the appellants. They noticed difference between the production reported in the Batch Manufacturing Report (BMR for short) and the Daily Stock Account. Some invoices with same serial numb....
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....like. No source of fund for this clandestine activity had been unearthed. (v) The stock of semi-finished goods valued at Rs. 32 lakhs (subsequently corrected as Rs. 16 lakhs) available at the time of search had not been taken into account. This would itself account for substantial part of the value on which duty was demanded. (vi) Both the lower authorities have failed to appropriate a sum of Rs. 51,295/- paid by the appellant. (vii) There is not a single consignment of allegedly clandestinely removed goods caught or even evidence of a single buyer. (viii) The Commissioner (Appeals) erred in assuming that the burden of proof in this case is cast on the appellants while it is well-settled....
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....d as waste and scrap, which would have accounted for about 40% of the value on which duty had been demanded. (xiii) The demand in Annexures I and II was based on the entire production during the disputed period. The authorities were duty bound to exclude the stock found during investigation. (xiv) Subsequent to the date of investigation, several older batches of formulations were credited to RG-1 stock which were manufactured during disputed period. The appellant had produced before the original authority correlation of these batches with production credit notes entered in RG-1 book. Since such quantity also formed part of Annexures I and II, the authorities below were bound to exclude the quantity of products available but not finish....
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....earned Advocate relied on the following case-laws in support of his contentions :- Case-law Gist CCE, Hyderabad v. Annapurna Industries Ltd. - 2003 (153) E.L.T. 586 (Tri.-Bang.) Consumption of inputs and packing materials to be proved by Revenue. CCE, Bangalore v. MICO Ltd. - 2001 (136) E.L.T. 649 (Tri.-Bang.) Shortage between actual stock and internal record does not prove shortage in RG1 stock. V.K. Thampy v. CCE, Kochi - 1994 (69) E.L.T. 300 (Tribunal) Consumption of power and raw material to be proved by Revenue. Punjab Fibres Ltd. v. CCE, Delhi - 2002 (141) E.L.T. 819 (Tri.-Del.) Initial burden of proof on Revenue cannot be discharged ....
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....ccount by the Adjudicating Authority. Moreover, as per the Production Chemist, the yield is only 90% in formulations. However, the department has taken the yield to 98% or 99%. This itself inflates the duty demand. There is no single instance for the removal of any product in a clandestine manner. No evidence of even a single customer is on record. The Commissioner (Appeals) is not correct in holding that the burden of proof that items have not been removed clandestinely is on the appellant. In fact the converse is true. It is the burden of the Revenue to prove that the appellants had removed goods clandestinely. The case-laws relied by the appellant are appropriate. In these circumstances, we set aside the demand of Rs. 18,19,434/-. 5.1....