TMI Blog2007 (12) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... 12-2007 - S/Shri P.G. Chacko, P. Karthikeyan, JJ. REPRESENTED BY : Shri K.S. Venkatagiri, Advocate, for the Appellant. Dr. Nitish Birdi, SDR, for the Respondent. [Order per : P.G. Chacko, Member (J)]. - The appellants are a Public Sector Undertaking. They are aggrieved by denial of Modvat credit to the extent of Rs. 69,15,108/- on inputs found short for the period 1995 - 96 to 1998 - 99 as also by a demand of duty of Rs. 42,119/- on coal ash cleared during the period from 23-7-1996 to 31-3-1998. They are also challenging a penalty [equal to the sum of the above amounts] imposed on them under Rule 173Q of the Central Excise Rules, 1944 read with Section 11 AC of the Central Excise Act. 2. After examining the records and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al products and, on this basis, the appellants were held not eligible for input duty credit under Rule 57A of the aforesaid Rules. It is submitted by learned counsel that the shortage found is only to the extent of 0.66% of the total quantity of inputs consumed in the manufacture of finished goods during the material period. Some of the inputs received in the factory during such period were not modvatable on account of the fact that they were not duty-paid. Separate account of such inputs was also furnished to the Commissioner and such accounts indicated only 0.35% shortage. Contextually, learned counsel submits that, in similar cases, this Tribunal has condoned such shortages of inputs in the cases of other companies, having regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the submissions, we find that the Revenue has not alleged that any part of the inputs, whether moveable or not received in the assessees factory was diverted without being used in the manufacture of boiler components and accessories (final products). The appellants have taken Modvat credit of the duty paid on duty-paid inputs received in their factory during the material period. No part of these inputs was alleged to have been removed as such out of the factory. No theft of such inputs was reported at any point of time, nor alleged. The assessees account of shortages of inputs vis-a-vis quantities received in factory was accepted as such by the Revenue. If that be the case, we are at a loss to understand as to why their explanation of sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars comprising the period of dispute. The shortage was found to be reasonable and accordingly the demand raised by the Revenue was vacated. In the case of Denso Kirloskar Indus. Pvt. Ltd. (supra), it was held that, when large number of inputs were handle, shortage of 0.6% was reasonable in the absence of allegations of clandestine removal, mala fides etc. In the case of ASCO (India) Ltd. (supra), the shortage of inputs written off by the assessee in the balance sheet was to the extent of 0.7%. It was held that, when compared to the total quantity of inputs received in the factory, this was negligible and therefore no CENVAT credit was deniable on the shortage. In the present case, by any standards, the shortage is very much within the ran ..... X X X X Extracts X X X X X X X X Extracts X X X X
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