2012 (1) TMI 131

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...., learned Advocate appearing for the respondents. 2. As facts on records, the respondents are engaged in the manufacture of Pan Masala under the brand name "Shyam Bahar". Their factory premises were visited by the officers on 4-12-2006, who conducted the various checks and verification. As a result, the stock of finished goods was found short by 612.400 kgs. The stock of raw material was also found short by 70.770 kgs as detailed in Panchnama drawn on the spot. The authorized representative of the respondent admitted in his statement the shortage of final products as also of the raw material and offered to deposit duty of Rs. 1,03,067/- in respect of final products found short. The same was accordingly deposited by them by way of debit e....

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....uty confirmation on the basis of short found raw material he observed as under :- From the above chart, it is evident that 9 ingredients of Pan Masala was found short and when it was calculated that how much quantity of Pan Masala can be manufactured out of short found raw materials as per input-output norms provided by the appellant then it has been calculated that the quantity of Pan masala manufactured out of raw materials found short varies from 2.78 kgs. (on the basis of supari) to 1406.25 kgs. (on the basis of M.C. Powder). The Department have confirmed the demand on the highest side on the basis of raw material found short i.e. only one ingredient - M.C. Powder. However, the appellant has contended that main ingredients Gutkha i.e....

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....ion of said raw material in the manufacture of final product cannot be ruled out. The Appellate Authority has observed that there was short of M.C. Powder which was on the highest side cannot be taken as ground for confirming the demand on the final products. They submitted in the absence of explanation from the respondent as regards physical shortage of the raw materials, the same have to be considered as having been utilized in the final products. By relying upon the Kolkata Bench decision of the Tribunal in the case of Chowbey Sugandhit Tambaku Co. v. CCE, Patna - 2001 (131) E.L.T. 222 (Tri.-Kolkata), it stands submitted that the Revenue authority are not required to prove by mathematical precision activities of clandestine removal. 8....