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2014 (11) TMI 116 - AT - Central ExciseDiscrepancy in stock - shortage in stock of inputs - Cenvat Credit - Whether the shortage of raw material/inputs has been correctly explained and whether the appellant is required to reverse the Cenvat Credit availed on such short found raw materials - Held that:- Adjudicating Authority has not controverted or disputed the figures of procurement of the 5 raw materials in question as well as the consumption thereof. The Adjudicating Authority has tried to work out the %age of shortage as against the physical stock on the day of visit of the DGCEI authorities. In our considered view this is incorrect way of conclusion that the appellant is ineligible to avail Cenvat Credit of the quantity without shortage. It is a common knowledge that in the industry herein the appellant is engaged in, there is always loss during the manufacturing of the final products, as the inputs/raw material are melted in a furnace and the final products emerge in the form of blocks, flats etc. We find from the entire adjudication order that there is no weightage given by the Adjudicating Authority for the possible and explainable losses during the manufacturing process wherein these 5 raw materials are consumed. As the Adjudicating Authority has not disputed the quantity of the receipt of the 5 raw materials in the year 2004-05 and consumption thereof, the shortage noticed which is 0.42% and 0.43%; is in our view can be attributed to manufacturing loss and within tolerance limit of the industry. Since there is no dispute as to the receipt and consumption of the raw material and there being no allegation of clandestine removal of the inputs, the shortages found during the visit of the officers being within the acceptable tolerance level of shortages, the impugned order that confirmed the demands against the appellant is unsustainable and is liable to set aside and we do so - Decided in favour of assessee.
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