TMI Blog2006 (11) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... at Rs. 33.42 lakhs involving Cenvat Credit of Rs. 5,34,746/-. The Appellant s Senior Executive (Commercial) Shri S.P. Ponde, accepted the Cost Audit Report to be binding on the company to submit that such shortage of raw material was not on account of any mis-utilisation but on account of various reasons. Reference was made to Cost Accountant s letter dated 16-5-2004 detailing the reasons for such shortages. 2. However, the proceedings were initiated against them by way of issuance of show cause notice dated 15-12-2004 proposing reversal of Modvat credit. The said proceedings culminated into an order passed by the Joint Commissioner confirming the demand of duty and also imposing personal penalty of identical amount. Appeal against the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s explained to us the procedure of physical verification of stock followed by management are, in our opinion, is reasonable and adequate in relation to the size of the company and nature of its business. (c) No material discrepancies were noticed on physical verification of stocks of finished goods, trading goods, stores, spares parts, components raw materials as compared to book records. (iv) That it is amply clear from the auditor s report that the discrepancy, if any is not significant. The show cause notice also ignores letter CC/010/2004-05 dated 16th May 2004 issued by Shri Dhananjay v. Joshi and Co. Cost auditor submitted to the department. It is pertinent to bring to the notice of the Appellate authority the following points of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e against before the Hon ble Supreme Court. 6. I find that the fact that the total shortage of raw material is to the extent of 0.2% has not been disputed by the revenue. There is also no evidence on record to show that the raw material in question has either been cleared by the appellants clandestinely or has been consumed in the manufacture of the final products, cleared without payment of duty. No doubt, it is the assessee, who has to explain the shortages of the raw material, after having availed the credit, but the fact that the appellant was dealing with the huge raw material and voluminous production and was shifting the accounting method to new computerized programmers, has to be taken into the account. Further, the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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