TMI Blog2011 (2) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... nce limits for weighbridges of different capacities - Appeal is dismissed - E/839/2005-MUM. - A/114/2011/EB/C-II - Dated:- 28-2-2011 - P.G. CHACKO, M. VEERAIYAN, JJ. P.K. Agarwal for the Appellant. Vishal Agarwal and Uday Shetty for the Respondent. ORDER P.G. Chacko, Judicial Member. The respondent in this appeal of the department is engaged in the manufacture of Cold-Rolled steel sheets/coils, etc. Their main raw materials are Hot-Rolled Coils (HR Coils). A team of officers of the department visited their factory on 6-9-2002 and upon scrutiny of records noticed that the respondent had received lesser quantity of HR Coils than shown in the invoices and transport challans/lorry receipts but MODVAT/CENVAT credit had been taken of the duty paid on the entire quantity of HR Coils shown in the said documents. As all the records of raw material receipts were not readily available in the factory, the officers again visited the unit and withdrew certain records under Withdrawal Memo dated 17-9-2002. They also obtained true copies of computerized registers of HR Coil receipts and invoices on sample basis from the respondent. A statement of the company's Authorized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was held to be invocable and the cited case law was held to be inapplicable. In the result, the entire demand of duty (with interest) came to be confirmed against the party alongwith penalties imposed on them. But the party succeeded on merits in an appeal filed with the Commissioner (Appeals). Hence, the present appeal of the department. 4. Heard both sides. Ld. JCDR referred to the relevant rules (Rule 3(1) of the CENVAT Credit Rules, 2002; Rule 57A(4) of the Central Excise Rules, 1944, etc.) and submitted that MODVAT/CENVAT credit could be allowed only on that quantity of input which was actually received in the factory and used in or in relation to the manufacture of the final product. In this connection, he placed reliance on the Punjab and Haryana High Court's judgment in CEA No. 13/2004 CCE v. Krishna Wire Products (P.) Ltd. [2010] 28 STT 174 (Punj. Har.). It was argued that the rules were mandatory and, hence, required to be complied with for claiming credit of duty paid on inputs. In this context, ld.JCDR claimed support from CCE v. Nicholas Piramal (India) Ltd. 2009 (244) ELT 321/[2010] 24 STT 66 (Bom.), CCE v. Karam Chand Appliances (P.) Ltd. 2009 (238) ELT 706 (H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duct as also the proof of payment of duty on the input, and that no curtailment of credit of such duty was permissible. The ld. Counsel also referred to Sanjay Dahiwade's statement (copy produced) and submitted that nothing contained therein could be considered as amounting to admission of short-receipt of HR Coil. It was only a general statement explaining the mode of weighment on weighbridge, the reasons for variation in weight of material between invoice/challan and "HR Coil Receipt Register", etc. The counsel submitted that, though Dahiwade had stated that an amount proportionate to any quantity of material lost in transit was deducted from the freight billed by the transporter, there was not even an allegation in the SCNs that the respondent had recovered any proportionate amount' from transporter. The ld. Counsel also submitted that the Commissioner (Appeals) in this case had rightly followed the view taken by the Tribunal in the cases of Sipta Coated Steel Ltd. (supra) and Mardia Chemicals Ltd. v. CCE 2003 (158) ELT 378 (Trib. - Mum.), which view was approved by the Larger Bench in the case of Bhuwalka Steel Industries Ltd. (supra). 6. We have carefully considered the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 enroute 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 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 dispatch 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is nothing in the above statement which can be construed to mean that any part of any particular consignment of HR coil was actually lost in transit by theft during the period of dispute or that the respondent actually recovered any "proportionate amount" by way of deduction from transporter's bill on account of loss of material by theft. Even the SCNs did not allege to this effect. Therefore, even the limited ground raised by the appellant with reference to the party's statement is not tenable. The ground raised with reference to tolerance limits of weighbridges stands negatived by the Larger Bench in the aforesaid the case. Further, the view held by the Tribunal in the cases of Sipta Coated Steel Ltd. (supra) and Mardia Chemicals Ltd. (supra) which was followed by the Commissioner (Appeals) in the instant case, stands approved by the Larger Bench in Bhuwalka Steel Industries case (supra) and, presumably, the department has not challenged the Larger Bench decision. 8. The HR Coils in question would pass the tests laid down in the Bhuwalka decision of the Tribunal's Larger Bench, to be eligible for MODVAT/CENVAT credit of the duty paid on the entire quantity covered by the inv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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