2024-VIL-385-CESTAT-HYD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Manufacture of fruit pulps – Allegation of clandestine removal – Demand of duty – Appellants are engaged in manufacture of various types of fruit pulps – Anti-Evasion Officers visited unit of Appellants and found excess physical stock of finished goods in comparison with stock accounted in manual RG1 Register – Commissioner confiscated excess stock of fruit pulp and imposed redemption fine – Officers again visited the factory and verified stock of finished goods and compared same with stock reflected in SAP account and found certain shortage – Department issued show cause notices proposing to recover specified amounts of duty on fruit pulp allegedly cleared clandestinely – Commissioner confirmed demand of specified duty – Whether demand of duty confirmed on alleged shortage of goods said to be found on basis of comparison of quantity accounted in SAP system and quantity accounted in manual RG1 Register is correct or not – HELD – Sole ground based on which demand has been confirmed by Commissioner is that there was certain difference in quantity of fruit pulp accounted for in RG1 Register and those physically available in factory premises, when compared with stock accounted for in SAP system – Differential quantity has been considered as clandestinely removed by Appellants and demand has been confirmed accordingly – It is an admitted fact that Appellants were maintaining all their records including statutory records relating to production and clearance of final products in SAP system – Department preferred to compare physical stock with defunct RG-1 stock, even though correct stock on day-to-day basis was maintained by Appellants in their SAP system – When Department compared physical stock with defunct RG1 Register for purpose of arriving at excess stock to confiscate same, Department cannot take a different stand and compare quantity accounted in SAP system with quantity accounted in defunct RG1 Register to arrive at alleged shortage and demand duty thereon – SAP alone was the proper account being maintained and there cannot be any comparison with so called RG1 register either for excess or for shortage – There was no excess or shortage of fruit pulp when physical stock is compared with stock accounted for in SAP system – Department’s reliance on manual RG1 Register, when accounts are maintained in SAP system, is misconceived and cannot be accepted – Stock verification was not done by officers in proper and justifiable manner – Department has not brought any independent evidence to prove its claim of clandestine removal – Impugned order passed by Commissioner set aside – Appeals allowed
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