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2013 (3) TMI 114 - HC - Central ExciseCenvat Credit disallowed on the quantity of raw material not been received in the factory and not utilized in the manufacture of the finished goods - assessee charged for wilful suppression of the facts - assessee is engaged in the manufacture of Zinc, Lead and Copper Sulphate Solution - Held that:- Lead and zinc concentrates were received by the assessee in its factory whereupon credit had been taken. The assessee had accounted for the shortage in the raw material found during stock taking by writing off these losses. The percentage of shortage found had been about 0.05% during the subject period with explanation given that the loss occurred due to dryage of the moisture content and some likely difference in weighment. The significant aspect of the matter is that it had not been the case of the revenue that any part of the duty paid inputs were diverted from the factory with intent to evade duty. Thus it would be too impracticable and unrealistic to ignore in such a matter the ground realities and the natural causes where the excavated contents were being transported from mines to the factory, and where the contents were susceptible to dryage due to atmospheric conditions apart from the likelihood of some slight error in recording of measurements due to human or mechanical error. Thus, the principles available in the rules and in the law explained by this Court are clear that credit of duty cannot be denied or varied where input has become waste in or in relation to manufacture of final product, and more of practical approach is required to be taken in these matters. Unable to find any evidence on record on the part of the appellant that he had, in any manner, diverted the duty paid inputs with intent to evade duty. Hence, there does not appear any basis to consider it to be a case of “wilful suppression of facts”. The shortage had been of about 0.05% and factors as indicated by the assessee about some difference in the weighing scale or of the human error and of the loss in transit due to drying of moisture contents cannot be ignored altogether - unable to find any basis for the Adjudicating Authority’s observations about pilferage or theft having occurred during transit. The order as passed by the Appellate Authority and approved by the Tribunal appears to be more in conformity with the ground-realities and when a case of wilful suppression and diversion of the goods had not been established, disallowance of credit could not have been considered justified - in favour of assessee.
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