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PJ/Case Laws/2012-13/1178

Clandestine removal of the unaccounted cement manufactured using unaccounted gypsum.
Case:- M/s BANJARA CEMENTS LTD,SHRI M M REDDY,MANAGING DIRECTOR OF M/s BANJARA CEMENTS LTD Vs CCE, NAGPUR
 
Citation: - 2012-TIOL-994-CESTAT-BANG

Issue: Clandestine removal of the unaccounted cement manufactured using unaccounted gypsum.

Brief fact: -The officers, during visit to the factory premises found a consignment of gypsum, weighing 39.42 MTs was not accounted; they also found shortage of about 550 Nos. Of HDPE/PP bags and at the same time, they found 20,450 Nos. Of PP bags were kept in a separate room without being accounted. They found shortage of 36 MTs cement in silo when compared to the statutory records. On this basis, it has been alleged that using the unaccounted quantity of gypsum, they might have manufactured about 4850 MTs of cement and cleared the final products without payment of duty and accordingly, duty amount of Rs.17,24,138/- along with interest stands demanded and penalty imposed. This order of the original authority was upheld by the Commissioner (Appeals).
 
Respondent contention:- The learned Additional Commissioner (AR) sought for pre-deposit as per the impugned order on the strength of findings and reasoning of the Commissioner (Appeals). He particularly submits that the evidence taken in totality show that there was clandestine removal of the unaccounted cement manufactured using unaccounted gypsum.
 
Reasoning of Judgment:-The shortage of cement found in silo was ascertained by dip reading method. It was claimed that the quantum of gypsum said to have not been accounted has been used for manufacture of cement which was accounted and due to inadvertence, certain bills relating to gypsum were not accounted. In the absence of any other evidence indicating suppression of production and clandestine removal, Tribunal hold that the appellant has made out a case for waiver of dues as per the impugned order. Both the applications are allowed and there shall be waiver of pre-deposit of dues as per the impugned order and stay of recovery thereof till the disposal of the appeals.
 
Decision: - Stay granted.

Comment: -The charge of clandestine removal cannot be based on presumption and assumptions. It has to be corroborative and cogent evidence. The shortage in one raw material cannot lead to conclusion that there is clandestine removal. 

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