2009 (7) TMI 978

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....quantity of 16437 Kgs of finished goods involving duty of Rs. 1,29,773/- was found short. Further, the officers also noticed shortage of raw materials total valued at Rs. 2,66,345/- involving duty of Rs. 40,297/-. It was also noticed that one of the Fork Lift, on which the appellant had availed the modvat credit, was not available in the factory. Appellants admitted that the said Fork Lift was transferred to their another unit without reversal of credit of Rs. 77,345.49. The statements of the General Manager and Managing Director accepted such shortages of finished products and raw materials. 2. Based on the above, proceedings were initiated against the appellants which culminated in the orders passed by the lower authorities confirmi....

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....shortage of the final products are pseudo and not real, inasmuch as the total shortages are to the tune of 0.3% of their total production. Such shortages is inevitable due to various practical reasons, such as tearing of bags (containing finished goods) at the time of storage, spillage during re-packing or re-bagging, accounting of clerical errors, variance of weighing scales etc. which are normal practical and productions hazards due to which minor weight difference do occur over a period of time. In the absence of any evidence to arrive at the conclusion that the goods have been cleared clandestinely, confirmation of demand was not justified. He explains that General Manager has not accepted the clandestine clearance but has simply accept....