2018 (1) TMI 632

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....ymers India Ltd. is engaged in the manufacture of PVC and TRP Polymers; the factory was visited on 8/9 August, 2007 and Central Excise Officers found that there was difference in closing stock of finished goods and inputs. Panchnama was drawn and shortages were recorded in the Panchnama. Subsequently, show cause notice was issued demanding duty on shortage of the finished goods and also in the shortage of raw material inputs. The show cause notice was also issued to individuals for imposition of penalties. The main Appellant contested the show cause notice on the ground that the Panchnama was incorrect and stock taking was erroneous inasmuch as the finished goods/stocks which were lying within the factory premises were not considered raw ma....

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....h witnesses, they were not produced and hence, no reliance can be placed on the panch and if the panch is not to be considered , the entire case of Revenue's stands demolished as there cannot be shortage. It is his further submission that the allegation of finished goods which was allegedly removed in clandestine is produced by Revenue to state that there was clandestine removal and as regards the inputs the inputs they were stored in nearby go-down. It is his submission that the Appellant had sought permission of the Revenue authorities vide letter dated 1.8.2007 for storage of duty paid inputs in go-down nearby and draws my attention to various documents which indicated movement of such duty paid inputs from the premises of the main A....

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....cating that panchas had left the premises. In my considered view, it is the duty of the adjudicating authority to summon and make available the panch witnesses for cross-examination, if he wants to rely upon the panchnama to adjudicate this matter. In the case in hand, the Revenue's entire case and demand is based on the panchnama which records shortages of the finished goods and the inputs at main Appellant's factory premises. In the absence of cross-examination of the panch witnesses, the adjudicating authority may not be able to rely upon the Panchnama which is drawn at the factory premises. In my considered view, the adjudicating authority should have made efforts to produce panchas and permit cross-examination in order to elici....