2016 (3) TMI 661

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....s confirmed and further penalty was imposed of Rs. 15,31,716/- under Section 11 AC of the Central Excise Act, 1944 read with rule 25 (1) of the Central Excise Rules, 2002 and Rs. 1,73,303/- under section 11 AC read with rule 15 of CCR, 2004. 2. The brief facts are that the inspection was carried on by the office of the revenue which started on 6.9.2007 at about 5 PM and ended on 7.9.2007 at about 3:30 AM as mentioned in the Panchnama. According to the Panchnama, the stock was valued in the presence of one Mr. Atul Bhatnagar, Authorized Signatory of the appellant. As per the Panchnama, there is some shortage found in the stock and the duty on the same was calculated at Rs. 17,05,019/-. Further the statement of Shri Manish Goel, Director o....

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....of the rolling mill, which are not visible as manufacturing process requires high-temperature in the rolling mill. It was further contended that the Panchnama is silent as to the manner of verification. The officers of the inspection team had arrived at 5.00 P.M. on 6.9.2007 and they left at 3.30 A.M. on 7.9.2007. Thus it is apparent that no proper investigation or physical verification was made of the stock as it is not possible to verify the stock which was more than 3000 MT and lying scattered over a large area in the factory premises. Thus the stock taking was only eye estimation and as such the same is not reliable and the deposit of duty or agreeing to the apparant shortage do not lead to any adverse inference of clandestine removal. ....

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....ds. The shortage of finished goods, by itself would not unless it is related to clandestine removal of finished goods, for which there was no material evidence, infer evasion of Excise duty and that no penalty can be imposed. The ld. Counsel also points out from the statement of facts that neither the revenue at any point of time asked for making adjust in the stock records nor the appellant adjusted the alleged shortage in the stock register and continued with the closing balance as was there at the time of inspection. The appellant have been regularly clearing goods on payment of duty. In other words it amounts to double payment of duty on the alleged shortage. 5. The ld. A.R. for revenue relies on the impugned order. He further states....