TMI Blog2009 (11) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... hy, Member (T)]. - Heard both sides. 2. This matter was initially heard by the Single Member Bench on 19-9-2008 when the learned Single Member noted the conflicting decisions of the Tribunal on the issue vide his Misc. Order No. 389/2008, dated 19-9-2008. The relevant extract of the learned Single Member's order is reproduced below:- In these appeals of the Revenue, the short question arising for consideration is whether Cenvat credit can be denied to the respondents for the period of dispute on the ground that there was a shortage of inputs covered by the relevant invoices vis- -vis weighment slips. The learned SDR has relied on the following decisions of the West Zonal Bench (Mumbai):- (i) Bombay Dyeing Mfg. Co. Pvt. Ltd. v. Commissioner of Central Excise, Mumbai [1999 (113) E.L.T. 331 (Tribunal)]. (ii) Mukand Ltd. v. Commissioner of Central Excise, Mumbai-III [2002 (150) E.L.T. 168 (Tri.-Mumbai)]. In these cases, it was held by the Division Bench that any quantity of inputs not physically received in factory was not eligible for Modvat credit. On the other hand, the learned counsel for the respondents has claimed support from the following de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the quantity received on weighment is found to be less than quantity indicated in document. (iii) Commissioner of Central Excise Customs, Aurangabad v. Sipta Coated Steel Ltd. [2000 (125) E.L.T. 578 (Tribunal)]. - SMC Difference in weighment on inputs at place of procurement and place of usage in factory of assessee not a ground for disallowance of Modvat credit. (iv) Mukand Ltd. v. Commissioner of Central Excise, Mumbai-III [2002 (150) E.L.T. 168 (Tri.-Mumbai)]. - DB Difference in quantity of scrap imported as weighed on Bombay Port Trust weighbridge and as weighed on factory weighbridge - Quantity of inputs not physically received in factory not eligible for Modvat credit. (v) Mardia Chemicals Ltd. v. Commissioner of Central Excise, Rajkot [2003 (158) E.L.T. 378 (Tri.-Mumbai)]. - SMC Short receipt of inputs - shortage too meager - such variation in weight occurs due to weightment at various weighbridges. (vi) Gharda Chemicals Ltd. v. Commissioner of Central Excise, Mumbai-III [2004 (167) E.L.T. 359 (Tri.-Mumbai)]. - DB After considering the plea made of the fluctuation permissible as per the weighbridge in question as provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt it was found that certain small percentage of inputs subjected to transit/handling losses - Modvat credit allowed . (iv) Commissioner of Central Excise, Vadodara-I v. Nirma Ltd. [2005 (192) E.L.T. 304 (Tri.-Mumbai)]. - SMC Shortage very very minimal being only 0.01% - Variation in weight due to weighment at different weigh-bridges and also because of evaporation during transit and well within permissible limit of fluctuation as per weigh-bridge provided by Standards of Weights and Measures Act, 1976 and Rules made thereunder - Modvat credit admissible. (v) Estee Auto Pressings Pvt. Ltd. v. Commissioner of Central Excise, Chennai-III [2007 (209) E.L.T. 211 (Tri.-Chennai)] - SMC. Short receipt of inputs due to weighbridge differences - where shortages observed are not significant (within 1 to 2% range) and supplier is not debited for the proportionate price, these quantities not to be considered as short receipt of inputs. (vi) Union of India v. Bhilwara Spinning Ltd. [2008 (222) E.L.T. 362 (Raj.)]. Having considered the rival contentions, we are inclined to agree with the view taken by the Tribunal that in the facts and circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1957); (v) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001), as amended by Section 169 of the Finance Act, 2003 (32 of 2003) which was amended by Section 3 of the Finance Act, 2004 (13 of 2004); (vi) the Education Cess on excisable goods leviable under clause 81 read with clause 83 of the Finance Bill (No. 2), 2004 which by virtue of the declaration made in the said Finance Bill under the Provisional Collection of Taxes Act, 1931 (16 of 1931), has the force of law; (vii) the additional duty leviable under Section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v) and (vi) above; and (viii) the additional duty of excise leviable under Section 157 of the Finance Act, 2003 (32 of 2003) paid on any inputs or capital goods received in the factory on or after the first day of March, 2002, including the said duties paid on any inputs used in the manufacture of immediate products, by a job-worker availing the benefit of exemption specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 214/86-Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Section 95 of the Finance (No. 2) Act, 2004 (23 of 2004); and [(xa) the Secondary and Higher Education Cess on taxable services leviable under Section 136 read with Section 140 of the Finance Act, 2007 (22 of 2007); and] [(xi) the additional duty of excise leviable under [Section 85 of Finance Act, 2005 (18 of 2005),]] [Provided that the Cenvat credit shall be allowed to be taken of the amount equal to central excise duty paid on the capital goods at the time of debonding of the unit in terms of the para 8 of Notification No. 22/2003-Central Excise, published in the Gazette of India, part II, Section 3, sub-section (i),vide number G.S.R. 265(E), dated, the 31st March, 2003] paid on - (i) any input or capital goods received in the factory of manufacture of final product or premises of the provider of output service on or after the 10th day of September, 2004; and (ii) any input service received by the manufacturer of final product or by the provider of output services on or after the 10th day of September, 2004, including the said duties, or tax, or cess paid on any input or input service, as the case may be, used in the manufacture of intermediate products, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us (Bhilwara Spinners) dealt with a case of transit loss due to evaporation. It also referred to the fact that in that case it was not in dispute that there was no diversion of the goods or that the entire goods has not been received and not put to use other than as input used in the end-product manufactured by the assessee. 12. Considering arguments from both sides and the case laws cited by both sides which have been extracted above, we are of the considered view that different types of shortages cannot be dealt with according to any one inflexible and fixed standard for the purpose of allowing credit under Rule 3(1) of the Cenvat Credit Rules. Decision to allow or not to allow credit in any particular case will depend on various factors such as the following:- (i) Whether the inputs/capital goods have been diverted en-route or the entire quantity with the packing intact has been received and put to the intended use at the recipient factory, (ii) Whether the impugned goods are hygroscopic in nature or are amenable to transit loss by way of evaporation etc. (iii) Whether the impugned goods comprise countable number of pieces or packages and whether all such packa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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