ORDER
S.S. Kang, Member (J)
1. Appellants filed these appeals against the common order-in-appeal passed by the Commissioner (Appeals).
2. Brief facts of the case are that appellants are engaged in the manufacture of irregular Marble Slabs. On 20-2-99, the Officers of the Revenue Department visited the factory of the appellant and during verification of the record, it was found that there was a shortages 286.659 sq. mtrs. of irregular Marble Slabs than the recorded balance.
3. During the search of the premises some loose slips were also recovered. The explanation given by Shri Kalu Ram Bagda, accountant in respect of these slips was that these are in respect of the job work undertaken in respect of trading activity of their trade Firm. Thereafter, the enquiry was conducted by Shri Rameshwar Prasad Bajaj, the Director of the appellant’s Firm where he also submitted that the sheets are in respect of the job work undertaken by them and also in respect of the trading activity of their other Firm and later on subsequently, a statement was recorded of Shri Bajaj in which admission was made that quantity mentioned in the slips was cleared without payment of duty. After issuance of show cause notice, the adjudicating authority confirmed the demand and imposed penalty on the Firm as well as on Shri Rameshwar Prasad Bajaj and Shri Kalu Ram Bagda. The appellants filed appeal and the Commissioner (Appeals) set aside the penalty imposed on Shri Kalu Ram, otherwise upheld the order passed by the adjudicating authority.
4. Heard both sides.
5. The contention of the appellant is that they are manufacturing irregular marble slabs and there were only shortage of 286.659 sq. mtrs. of irregular marble slabs. The contention of the appellant is that as their employees were measuring the irregular slabs and which is minor shortage which is less than 5% of the total production.
6. In respect of the demand on the basis of loose sheets, the contention of the appellant is that Shri Bajaj and their Accountant, at the time of visit disclosed the fact that these slips were in respect of the job work undertaking by them and in respect of the trading activity of their trading Firm. Both of them disclosed the names of the Firm/persons whose job work was done. The Revenue confirmed the demand only on the basis of the slips without verifying the contents of slips. No enquiry was conducted from the Firm/persons on whose behalf the job work was undertaken by the appellants. The contention of the appellant is also that there is no evidence which indicates that the appellants cleared the quantity mentioned in the slips without payment of duty.
7. The Revenue submitted that as per admission made by the Director of the Firm, the goods were cleared without payment of duty. Therefore, the appeal should be dismissed.
8. In this case the demand is in respect of shortages found at the time of verification. The shortages are less than 5% of the total production. The appellants are manufacturing irregular marble slabs, therefore, there is possibility of certain mistake in the measurement. The irregular slabs are of various shapes and sizes. There cannot be any uniformity in the measurement. Therefore, this minor shortage of irregular marble slips requires to be ignored which is out of the total stock of 5365.71 sq. metres.
9. The demand on the basis of loose slips recovered from the factory, the stand taken by the appellant before the Revenue authority that these are in respect of the job work undertaken by them and in respect of trading activity of their trading Firm. The appellants mentioned the names of the Firms/persons on whose behalf they had undertaken the job work. The similar explanation was given in respect of trading activity of their trading. The Revenue authority had not made any investigation from the persons/ Firms mentioned in the slips to contradict the stand taken by the appellant. Shri Rameshwar Prasad Bajaj made to statements. In the first statement there is no admission regarding removal of the goods without payment of duty and in the second statement the proper explanation was given regarding the entry in the loose sheets.
10. There is no evidence produced by the Revenue to show that explanation given by the appellant in their statement is false or untrue. The explanation given by the appellant is verifiable, there are persons whose names were mentioned in the slips where they had send any goods to the appellant for job work or not. This exercise had not been undertaken by the Revenue. In these circumstances the demand is not sustainable. Therefore, is set aside. Consequently, penalties are also set aside. Appeals are allowed.
