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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> Customs, Excise and Service Tax Appellate Tribunal Where shortage was insignificantly low as compared to total production and in absence of any positive evidence of clandestine removal, charge of clandestine removal cannot be sustained MANU/CS/0232/2019 - (01 Nov 2019) </td> </tr> <tr> <td align="left" valign="top">Varsana Ispat Ltd. and Ors. Vs. C.C.E. & S.T., Rajkot</td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE">Present appeal has been filed by Appellant against the confirmation of demand of Central Excise, interest and imposition of penalty under Section 11AC of Central Excise Act, 1944 read with Section 25 of the Central Excise Act, 2005. 
The Commissioner (Appeals) relies on the decision of the Tribunal in the case of B.R. Industries Ltd.- and in case of Swastic Industries vs. Commissioner of Central Excise to uphold the charge of clandestine removal. He rejected the contention of the Appellant that, shortage was just 0.31% of the total production of the relevant period and the fact that there was no production of TMT bars in last one year. He also holds that, the Appellant had failed to explain the reason for shortage at the time of verification or subsequently. 
In the instant case, on the visit of Central Excise Officer, no stock of TMT 12mm bars was found while the daily stock account showed the quantity of 368.540 MT. The Revenue recorded the statements of Shri Dipak Arora, Manager (Commercial) and Shri Kunal Bubna, General Manager (Commercial and Finance) both of them admitted that while there was no stock of 12mm TMT bars, the daily stock account showed 368.54 MT. However none of them admitted that there was any clandestine clearance. The charge of clandestine clearance has been made without any other evidence and it is a conclusion drawn solely on the basis of the discrepancy in the physical stock vis a vis daily stock account. 
 This discrepancy needs to be appreciated in the background of the fact that, the discrepancy consist of only 0.31% of the total production during said period and also from the fact that, the Appellant do not stand to gain by evading Central Excise Duty as they were availing benefit of Notification No. 39/2001-CE, which entitled them to claim refund duty paid through PLA in cash. In this background, where the shortage was insignificantly low as compared to total production and the appellants were not gaining by clandestine clearance and in absence of any positive evidence of clandestine removal, the charge of clandestine removal cannot be sustained. 
In instant case, Appellant has been able to show that plausible reason of the discrepancy and also the fact that there is no gain to be made by clandestine clearance in terms of Central Excise Duty thus decisions relied upon by the Commissioner (Appeals) are on significantly different facts. In view of above the demand is set aside and appeals are allowed.</td> </tr> <tr> <td align="left" valign="top" ></td> </tr> <tr> <td align="left" valign="top" >Tags : Demand, Confirmation, Legality</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr>  <td align="left" valign="top">Source : newsroom.manupatra.com</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top">&nbsp;</td> </tr> </table> </div> </body> </html>