TaxTMI 
TaxTMI 
2016 (3) TMI 612
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.... short at the time of physical verification on 26/11/10. In appeal, the learned Commissioner (Appeals) confirmed the duty but was pleased to waive the penalty. The appellant assessee is in appeal against confirmation of duty whereas the revenue is in appeal against waiver of penalty allowed by the impugned order. 2. The assessee, M/s Apollo Pipes Limited, is a manufacture of PVC pipes of various grades and sizes and fittings thereof. They are also availing the facility of Cenvat credit on the inputs and capital goods. An inspection was carried out in factory premises on 25.11.10 and 26.11.2010. During the visit, records were examined and physical stock taking was done of both finished goods and raw materials, lying in the unit. It is fur....
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....ger (Works) was recorded on 26/11/2010 wherein he stated that unit have come into existence in November, 2009 by transfering of plant and machinery from their unit I & II at Sikandrabad which are now closed. The work of production and clearances is monitored by him on day to day basis. As regards the shortage found, he stated that although the calculations have been drawn in his presence but the rate was calculated on the basis of the average weight of 10 pipes for each size and that seems to be the obvious reason for variation. It is further stated that he would look into the reasons for variation and inform the revenue in due course. 3. A show cause notice dated 23/11/2011 was issued alleging therein that under the provisions of rule 1....
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.... there being no allegation or any incidence of clandestine clearance found on the part of the appellant assessee the whole proceeding is bad and fit to be dropped. It was further stated that the stock taking is an approximate figure drawn on the basis of average weight of 10 pipes and accordingly whatever variation and/discrepancies, found the same is normal variation not calling for any adverse inference. Further it is urged that as the assessee have paid the duty on the alleged shortage prior to issue of show cause notice, at the investigation stage itself, the issue of show cause notice is bad and fit to be dropped. It is further stated that the assessee cleared the goods under cover of invoice and no circumstances have been found of any....
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....e inspecting officials did not make proper verification of the stock at the time of inspection, it is quite normal that the aggrieved assessee would have immediately objected to any such improper method of verification of stock then and there. When two of the officials gave their statements expressing their ignorance about the shortage of clinkers, it was for the appellant to satisfactorily explain the said defect in the maintenance of records or the actual availability of stock. 6.3 The department has further alleged the charges of clandestine removal on the goods found short. However, I find there is no positive evidence adduced by the department to prove clandestine removal. The burden to prove removal without payment of duty is....
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....k figure, as is evident from the manner in which the stock taking was done. The appellant maintained the stock records on the basis of actual weight, whereas as at the time of inspection-average weight of 10 pipes was taken and the same was applied to the approximate number of pipes of finished goods available. Thus, the variation and the discrepancy found, which is about 10% of the finished goods, is normal variation. He further stated that in absence of any instance of clandestine removal, the duty assessed on the same on estimation, is bad and fit to be set aside. So far the raw material - PVC resins is concerned the gross weight found on the date of inspection was 1,61,500 kg and the shortage was worked out at 7,683 kg which is less tha....