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TMI Blog2009 (11) TMI 177X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 decisions of the Tribunal: (i) Neera Enterprises v. Collector of Central Excise, Chandigarh - [1998 (104) E.L.T. 382 (Tribunal)]. (ii) Commissioner of Central Excise & Customs, Aurangabad v. Sipta Coated Steel Ltd. [2000 (125) E.LT. 578 (Tribunal)]. (iii) Mardia Chemicals Ltd. v. Commissioner of Central Excise, Rajkot [2003 (158) E.L.T. 378 (Tri.-Mumbai)]. (iv) Gharda Chemicals Ltd. v. Commissioner of Central Excise, Mumbai-III- [2004 (167) E.L.T. 359 (Tri.-Mumbai)]. (v) Gharda Chemicals Ltd. v. Commissioner of Central Excise, Mumbai [2004 (176) E.L.T. 296 (Tri.-Mumbai)]. In these cases, it was held to the contrary. One of the decisions cited by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner 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 provided under the Standards of Weights and Measures Act, 1976 and the Rules framed thereunder and on perusal of a chart indicating that in all cases the losses were within this permissible approximate 1% error in the weighbridge weighments, it is to be held that the shortages are accounted for. In fact, in some cases the receipt of excess goods have not been objected to which itself goes to prove that the weighbridge, which the appellant was using, was not giving the correct weighment reports." (vii) Gharda Chemicals Ltd. v. Commissioner of Central Excise, Mumbai [2004 (176) E.L.T. 296 (Tri.-Mumbai)]. - SMC "Shortage in inputs received in factory merely 0.5% and attributable to difference in calibration of weigh-bridges - Appellant not paying any lesser amount, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 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 circumstances, when it is not in dispute that there is no diversion of the goods covered under the invoices in question and entire goods received under consignment has not been put to any use other than as input in the end product manufactured by the assessee and the transit loss was found by the Tribunal to be normal loss due to evaporation, it must be held that the CVD paid by the consigner/importer was paid in respect of the goods entirely used by the assessee as inputs in the manufacture of end product. Moreover, Rule 57(9) envisages that such amount of Modvat credit availed by the assessee, which is evidenced by the invoices, has inherent co-relation with the payment of duty with goods covered by such invoices. Where the CVD, Customs or Excise duty on the inputs received by the assessee in the factory and used by him in manufacturing of end product ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Excise, dated the 25th March, 1986, published vide number G.S.R. 547 (E), dated the 25th March 1986, and, received by the manufacturer for use in, or in relation to, the manufacture of final products, on or after the first day of March, 2002. Explanation. - For the removal of doubts it is clarified that the manufacturer of the final products shall be allowed Cenvat credit of additional duty leviable under Section 3 of the Customs Tariff Act on goods falling under heading 98.01 of the First Schedule to the Customs Tariff Act." 7. Rule 3(1) of the Cenvat Credit Rules, 2004 also contains a similar provision:- 3. (1) A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as the Cenvat credit) of - (i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Excise, dated the 25th March, 1986, published in the Gazette of India vide number G.S.R. 547(E), dated the 25th March, 1986, and received by the manufacturer for use in, or in relation to, the manufacture of final product, on or after the 10th day of September, 2004: Explanation. - For the removal of doubts it is clarified that the manufacturer of the final products and the provider of output service shall be allowed Cenvat credit of additional duty leviable under Section 3 of the Customs Tariff Act on goods falling under heading 98.01 of the First Schedule to the Customs Tariff Act." 8. The main ground of the appeal taken by the Department is that the impugned goods were re-rollable steel items and hence there is no chance of natural loss during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 packages and pieces have been received and accounted for at the receiving end. (iv) Whether the difference in weight in any particular case is on account of weighment on different scales at the despatch and receiving ends and whether the same is within the tolerance limits with reference to the Standards of Weights and Measures Act, 1976. (v) Whether the recipient assessee has claimed compensation for the shortage of goods either from the supplier or from the transporter or the insurer of the cargo. 13. All these factors listed above and any other relevant factor has to be kept in view in deciding any particular case as to whether the entire consignment has been received at the end of the recipient assessee without any diversion. Tolerances in respect of hygroscopic, volatile and such other cargo has also to be allowed as per industry norms excluding, however, unreasonable and exorbitant claims. Similarly, minor variations arising due to weighment by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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