TaxTMI 
TaxTMI 
2007 (8) TMI 199
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....credit on the LDO and capital goods like overhead wire and Nas Beams. On the conclusion of the investigation, the authorities issued a show cause notice to the appellants asking them to show cause as to why the amount of credit availed on the LDO be not demanded and reversed, why it is not held that the finished goods, which were found short are clandestinely removed and why the confiscation of the inputs, which were found excess than the recorded balance be not confiscated. The appellants contested the show cause notice on various grounds. The adjudicating authority after considering the contentions raised by the appellants, confirmed of demand and also imposed penalty. On an appeal against the such order, the Ld. Commissioner ....
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.... found short there cannot be any other presumption than clandestine removal of the said finished goods. 5. Considered the submissions made by both sides and perused the records. 6. It is seen from the panchnama dated 12/09/2003 that the authorities in the presence of panchas had recorded the physical stock taking which reads as under:- "Afterwards the Superintendent directed Shri Khan in our presence to take the stock of finished goods. Since the actual weight of the said finished goods was not possible the Khan just counted the bundles and informed us the weight as under:- (a) MS Bars &nb....
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....nbsp; --------------------- Inputs - Ingots -59.00 MT Ship Breaking plate -7.00 MT &....
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....les, which was mandatory on the part of the stock taking officers. The officers should have at least attached a worksheet to the Panchanama as to how they are arrived at the physical stock of 459.00 MT of finished goods. Likewise, the other allegation of excess of inputs also suffers from the same infirmity. The eye estimation of such a huge stock would definitely be erroneous. I find that the Tribunal in the case of Micro Forge (I) Pvt. Ltd., (Supra) had clearly in an identical situation held as under:- "It is an admitted fact that the stock position was arrived at on the basis of an estimation. The opinion of Shri A.N.Sinha, Works Manager was taken on the spot regarding the fluctuation in the weight of individual ....
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.... the allegation of clandestine removal will not sustain. 9. In view of the foregoing findings, the impugned order to the extent, it upholds the allegation of clandestine removal and confiscation of the excess stock of inputs is liable to be set aside and I do so. Consequently, the penalty imposed on the appellants on this issue is also liable to set aside and I do so. 10. As regards the amount of Rs.81,776/- reversed by the appellant towards inadmissible modvat credit on the LDO, the appellants is not contesting the same. Hence, the impugned order to the extent it upholds confirmation of the demand of Rs.81,776/- is upheld. 11. As regards the penalty imposed on the appellants, I find that the appellants had reversed th....