2016 (2) TMI 200

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....2005 issued to the Respondent herein. 2. Sh. A.K. Biswas Supdt. (AR) appearing on behalf of the Revenue argued that a demand of Rs. 95,18,877/- was issued to the Respondent, alongwith interest & penalty, on the ground of clandestine removal because shortages in the finished goods were detected by the statutory auditors of the Respondent. It is the case of the Revenue that Respondent can not deny the shortages of stock detected by their own statutory auditors. Learned AR relied upon the following case laws in support of Revenue's. Appeal: (i) Bharat Plast Vs CCE Valsad [2004 (168) ELT 2004 (Tri-Mumbai)] ii) Majestic Auto Vs CCE Gaziabad [2004 (172) ELT 0391 (Tri-Del.)] 3. Sh. Ravi Raghavan (Advocate) appearing on behalf of the Respond....

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....h go through Para- 7.5 & 7.6 of the adjudication order dt.- 30/03/2007 where such wrong recording of codes was argued by the Respondent and have been considered by the Adjudicating authority. That main buyers of the insulators manufactured by the Respondent are National Thermal Power Corporation Ltd (NTPC), Power Grid Corporation of India, various State Electricity Boards etc. who being Govt. departments/corporations can not be expected to procure clandestinely removed insulators. 3.2. Learned Advocate also made the bench go through Para- 9.5 of the order-in-original dt .30/3/2007, to argue that shortages mentioned by their auditors is only 0.29% of their total production & can be ignored in view of the relied upon case laws. It is also hi....

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....nished goods suggested by the auditors was finally accepted by the Respondent in their balance sheet for the relevant financial year. The case laws relied upon by the Revenue are not applicable for more than one reasons. Firstly shortages are not detected by the departmental officers during stock taking. Secondly 100% of the stock verification has not been done by the statutory auditors of the Respondent which was only based on test check. Thirdly, on reconciliation made by the Respondent no shortages were seen & nothing contrary has been brought an record by the Revenue. Fourthly, Respondent has never accepted the shortages which was the fact in the case laws relied upon by the Revenue. Fifthly, the case laws relied upon by the Revenue wer....