TMI Blog2014 (11) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... he annual stock taking which was accounted for by writing off the losses; the percentage of shortage found is less than 1.5% on an average for all the years in question; that after the inputs were received in the factory, there was a loss during the process of manufacture of finished products; the process of manufacture of finished products starts from the stage of taking raw material from the storage base to the factory and onward processes; under Rule 57D, on such losses, credit cannot be denied; a similar view was taken by it in the assessee’s own case in Final Order No. A/373/2003/NB-C, dated 12-6-2003 [2003 (6) TMI 144 - CESTAT, NEW DELHI] where similar issue was considered by the Tribunal; that it is not the case of the department tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book balances of material stores record during the course of their annual physical verification of stocks in the factory premises of the respondent; that the respondent was receiving Zinc/Lead concentrates from their mines; in the invoices received from their mines it was observed that dry weight alone was mentioned and valuation of material was done only in terms of dry weight; it was accounting for the same quantity of inputs as mentioned in their invoices in their material stores records as well as in Rule 57AE registers; on receipt of inputs, they were analyzed in their lab for estimating the moisture contained; after analyzing the moisture content, the actual dry weight of the inputs should have been arrived at and accounted for in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 576/- and a penalty of ₹ 33,70,041/- along with interest. He held that the respondent had failed to account for the shortage noticed in respect of Zinc and Lead concentrates in question at the time of their annual stock verification and the facts and circumstances of the case prove beyond doubt that the shortage noticed was not used in or in relation to the manufacture of its final products. 6. Aggrieved thereby, the respondent filed appeals before the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore (for short the Tribunal ). These appeals were numbered as appeal nos. E/71/2000 and E/758-760/2003. 7. By Final Order Nos. 771-774/2004, dated 8-4-2004, the Tribunal allowed the appeals filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue as - whether the loss on the inputs which was found out by the respondent during their annual stock taking and which was written off by them in their books of account should be considered as loss which is allowable under Rule 57D of the Central Excise Rules, 1944 or whether duty should be charged on such loss. It rightly held that credit of duty cannot be denied or varied where input has become waste in or in relation to manufacture of final product; that the loss in stocks was detected in the annual stock taking which was accounted for by writing off the losses; the percentage of shortage found is less than 1.5% on an average for all the years in question; that after the inputs were received in the factory, there was a loss durin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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