TaxTMI 
TaxTMI 
2023 (8) TMI 346
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....pany, who accepted the difference, but could not justify the reasons for such difference. Subsequently on 12.06.2008, Officers from Headquarters, Anti Evasion unit again visited the Appellant's factory and had undertaken fresh stock taking, wherein 2260 kgs. of Master Batch was found to be in excess over the recorded stock. 3. In his statement dated 12.6.2008, Shri Arindam Banerjee, stated that the difference might have occurred due to excess quantity shown as consumption reported by the Supervisor over a long period of time and it might have been purchased for job work of M/s. Hissar Udyog Pvt.Ltd. for which no Cenvat credit was taken. The said quantity of 2260 kgs. of Master Batch valued at Rs.61,585.00 was seized which was subsequently released provisionally vide order dated 11.11.2008. 4. In the course of investigation, the officers checked the Schedule of Balance Sheet for financial years 2004-05, 2005-06, 2006-07 and 2007-08 and found that the said sale figures in terms of quantities declared in the Schedule of Balance Sheets were not tallying with the quantity of clearance of those products declared in the monthly ER-1 returns filed by them during the corresponding financi....
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....ures declared in the balance sheets during the years 2004-05, 2005-06 and 2006-07 with the quantities of the clearance figures declared in the monthly ER-1 Returns, the figures mentioned in their ER-1 are correct. But while preparing the balance sheets, there were certain apparent mistakes and such mistakes were later corrected by proper Certificates issued by the Chartered Accountants. The Chartered Accountant's Certificates, all dated 18.06.2008, issued by M/s. V.K.Patwari & Co., reconciling the discrepancies between the figures appeared in the Schedules of Balance Sheets and those appeared in the statutory records were not taken into account by the Ld. Commissioner during the adjudication proceedings. 9. With regard to the allegation of difference in value of Rs.2,72,27,797/-, on the fabrics and laminated fabrics in the monthly ER-1 Returns as compared to the value reflected in the Schedule of the Balance Sheets, they submitted that the figures mentioned in the Schedule of Profit & Loss Account of their Balance Sheet for different financial years has not been properly reflected in the table. There were some apparent errors in the figures of the Schedule of the Balance Sheets. T....
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....ash memos are concerned, they were issued prior to the visit of the DGCEI officials in their factory on 17.05.2006. It was contended that the shortage found by the DGCEI officials was due to the fact that the goods have been removed from the factory without account and without payment of duty under the said 14 cash memos. They submitted that since they paid the duty for the shortages found by the DGCEI officials and admitted such shortages before the Settlement Commission, no further duty was payable by them in respect of 14 cash memos. However, to buy peace and not to precipitate the matter further, they have paid the duty amounting to Rs. 4,65,299/- payable on the 14 cash memos even before issue of the Notice. Hence, no penalty imposable on this alleged clearance through the 14 cash memos. In view of the above submissions, they prayed for dropping of all the Proceedings. 13. The Ld. A.R. reiterated the findings of the adjudicating authority in the impugned order. 14. Heard both sides and perused the appeal records. 15. We observe that the demand in the impugned order is mainly due to the difference between the sale figures available in the Schedule of the Balance Sheet for fin....
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....s figures found between the balance sheet and the and ER-1 Returns. There must be some positive evidence brought on record to substantiate the allegation of clandestine clearance. Mere allegation of shortage based on the difference in sales figures found between the balance sheet and the and ER-1 Returns, cannot be the basis for confirming the central excise duty on the differential quantity. This view has been held by the Tribunal in the following cases. 18.1 In the case of Kutch Steels Pvt Ltd 2014(300) ELT 141(Tri- Ahmd), it has been held that the demand based on difference of sale, income as indicated ER-1 and Balance Sheet, in the absence of any evidence of clandestine manufacture and sale of goods, is not sustainable. In the case of Martin & Harris Laboratories Ltd 2005(185) ELT 421 (Tri-Del), it has been held that the Balance sheet cannot be held as sacrosanct document to prove clandestine removal. The relevant portion of the decision is reproduced below. "4. We have heard both sides and gone through the record. We find that the allegations of suppression of production and removal of the goods without payment of duty in a clandestine manner had been based solely on the ba....
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....s not sustainable. 19. Regarding the duty demanded in respect of the 14 cash memos, the Appellant stated that out of those 64 cash memos, 50 cash memos had been accepted and covered under show cause notice dt.26.05.2009 and the demand in respect of the remaining 14 cash memos had been included in the present proceedings, involving duty of Rs.4,65,299/-. They submitted that since they paid the duty for the shortages found by the DGCEI officials and admitted such shortages before the Settlement Commission, no further duty was payable by them in respect of 14 cash memos. However, to buy peace and not to precipitate the matter further, they have paid the duty amounting to Rs. 4,65,299/- payable on the 14 cash memos even before issue of the Notice. Hence, no penalty imposable on this alleged clearance through this 14 cash memos. 20. Regarding the excess of stock of 2260 kgs. of Master Batch found on physical verification of stock of raw materials on 12.06.2008 is concerned, we observe that they have not taken Cenvat credit on the excess quantity of Master Batch found. The Appellant has given the explained that the difference might have occurred due to excess consumption of Master Batc....