2026-VIL-1817-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Clandestine removal alleged on shortage of input found in stock verification - Appellant, a manufacturer of TMT bars, was found on verification of stock to have a shortage of MS ingots on which CENVAT credit was taken, and SCN demanded duty on the ground that the shortage represented removal without accounting - Appellant submitted that the material had been issued to the factory area but not properly recorded in the record book, and that Revenue produced no corroborative evidence - The adjudicating authority and the Commissioner (Appeals) confirmed the demand - Whether mere shortage of input on verification of stock establishes clandestine removal so as to sustain the demand of duty - HELD - There was no dispute about the shortage on the date of verification. Revenue had not brought any corroborative evidence as to how the material was removed or how the Appellant received monetary consideration for it, and no proper documentary evidence was produced for the allegation of clandestine removal. Revenue is precluded from presuming clandestine removal unless it has corroborative evidence, and mere shortage of materials on its own will not prove clandestine removal. Following the Tribunal decision holding that clandestine removal is a serious charge to be discharged by tangible corroborative evidence such as sale of raw material, clandestine manufacture, flow back of funds or transport documents, the shortage was a case of improper accountal of inputs - The impugned order is set aside and the appeal is allowed
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