2018 (3) TMI 1684

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.... proposing demand of duty as per Rule 223A of the erstwhile Central Excise Rules, 1944 on the shortage of goods. 3. By the impugned Order, the Learned Commissioner of Central Excise, Bolpur Commissionerate confirmed the demand of duty of Rs. 1,61,10,218.00 under Rule 223A of the erstwhile Rules, 1994 and imposed penalty of Rs. 2,000.00 under the said Rules. Hence, the appellant filed this appeal. 4. We find that the demand of duty was confirmed on shortages found in respect of various items during the Annual Stock Taking conducted as on 31.03.89 and 31.03.90. The appellant contended that the shortage/excess in the Annual Shortage and Surplus Report is not actual but notional but as the production is recorded on estimation, whereas dispatc....

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....g of their production. The CBEC Circular NO.52/79 CX.6 dated 26.10.1979 has also laid down certain guidelines with regard to condonation of losses observed during annual stock taking. The appellants' submission that the excess/shortage noticed was only marginal should have been given in due consideration. The Tribunal in the case of M/s. Micro Forge Pvt. Ltd. Vs. CCE Rajkot reported in [2004 (169) ELT 251 (Tri.) has held that when the stock position is arrived at on the basis of estimation, the allegation of shortage of stock and consequent that removal of the goods cannot be sustained. A plethora of case law held that provisions of section 11A would apply in making demands of duty on balance found during stock taking. The appellants ba....

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....ed law that onus to prove clandestine manufacture and clearance is upon the Revenue and required to be proved by production of sufficient evidence. There is nothing on record to show that the appellants have been indulging into excess clearances without payment of duty. The appellants have satisfactorily explained the difference between the figures as reflected in annual financial account and those entered in RG-I for each and every item. As such we hold that confirmation of demand of duty against the appellants is not justified. We also find favour with the appellants' submissions that the demand is barred by limitation in as much as the show cause notice was issued on 5/12/1990 whereas the annual financial accounts are put to circulat....