TMI Blog2008 (9) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... epancy between the stock taking figures and the production figures which are accounted should not immediately lead us to the conclusion that the difference has been removed clandestinely. All the case-laws decided earlier by this Bench are clearly applicable. The longer period also is not invocable. Therefore, the duty demand cannot be sustained. The penalty imposed is also not justified. Hence, we allow the appeal with consequential relief. - Dr. S.L. Peeran, Shri T.K. Jayaraman, JJ. REPRESENTED BY : Shri G. Shiva Dass, Advocate, for the Appellant. Shri K. Sambi Reddy, JDR, for the Respondent. [Order per : T.K. Jayaraman, Member (T)]. This appeal has been filed against the Order-in-Original No. 12/2006-07 (RS) dated 21-2-2007 passed by the Commissioner of Customs Central Excise, Visakhapatnam-I Commissionerate. 2. Shri G. Shiva Dass, the learned Advocate, appeared on behalf of the appellant and Shri K. Sambi Reddi, the learned Departmental Representative, for the Revenue. 3. We heard both sides. 4. The appellants are the manufacturers of Iron and Steel products, which are excisable. They are regularly removing the goods on payment of duty. They conducted stock takings for the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /70-CX.6, dated 12-4-1971 has been reproduced. C.E.-S.R.P. - Problems of Iron Steel Industry - Regarding Since extension of S.R.P. to Iron Steel products, the major Iron Steel Plants have been representing about several difficulties in implementing Chapter VII-A of Central Excise Rules. The difficulties pointed out by Iron Steel Industry have been carefully examined by the Board and it has been decided to allow the following relaxation in case of major Steel Plants :- (i) Daily adjustment of duty in the PLA : Under Rule 173Q, every assessee is required to pay duty determined by him for each consignment by debit to an account current maintained with the Collector before removal of the goods, Steel Plants have represented that this requirement is not possible to be observed as a considerable time lag exists between the actual clearance and the processing of basis documents for purposes of calculating Central Excise duty before the PLA can be debited. The Steel Plants therefore, have requested that they be permitted to raise the debit in the PLA on weekly/periodical basis. It has been agreed that Steel Plants should be permitted to post the debit entries in their PLA within a period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und during stock taking, should give due consideration to the report of investigations as to the reasons for variations as determined by the plants themselves. (v) Submissions of R. T. 12 and R. T. 5 returns : It has been decided that Collectors will consider the request of the plants for extension of the date of submission of R.T. 12-14 days. It has also been agreed that since R.T. 5 return is not likely to afford a ready means of check to the central excise officers, so far as steel plants are concerned, this may not be insisted upon from the steel plants. (vi) Weight of raw materials transferred within the factory for production of finished goods : Steel plants wanted that transfer of such material might be followed on the basis of sectional weights and actual weighment need not be insisted upon. In view of the established practice showing sectional weights and the difficulties in taking the actual weight in many cases, this has been agreed to. 4.1 It has also been decided that since the production in many instances has to be determined on the basis of sectional weight which is calculated weight, the variations between the quantities finally cleared and the initial account shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts in the matter of accounting of their production. The C.B.E.C. Circular No. 52/79 Cx.6, dated 26-10-1979 has also laid down certain guidelines with regard to condonation of losses observed during annual stock taking. The appellants submission that the excess/shortage noticed was only marginal should have been given its due consideration. The Tribunal in the case of M/s. Micro Forge (I) Pvt. Ltd. v. CCE, Rajkot reported in 2004 (169) E.L.T. 251 (T) has held that when the stock position is arrived at on the basis of estimation, the allegation of shortage of stock and consequent illicit removal of finished goods cannot be sustained. A plethora of case laws hold that provisions of Section 11A would apply in making demands of duty on deficiencies found during stock taking. The appellants based many reasons for discrepancies between the RG-1 and the physical stock. For example, RG-1 is only based on estimated production and not based on actual weighment. Physical stock is also based on estimation of weight on the basis of volumetric estimate and conversion to theoretic weight based on sectional weight. A comparison between two estimation is inherently inaccurate. Losses like cutting, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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