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TMI Blog2012 (7) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... and during the course of physical verification of stocks as on 24/7/2008, the officers noticed a shortage of 2612 Kgs. copper wires which are used as input in the manufacture of finished goods. Consequently, the statement of Shri Nikilesh Kotia, Director of the appellant was recorded on 24.07.2008. In his statement the Director has admitted to the shortage and explaining the reasons stated that it had occurred inadvertently. Consequently, accepting the same, the appellant had discharged cenvat credit of Rs.1,40,830/- involved on the said shortage. The appellant was thereafter issued with a show cause notice on 20th May, 2009 proposing penalty. In their reply the appellant explained that even though the said quantity was lying in the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepting the said shortage they had paid the duty involved on such shortage before issuance of the show cause notice and accordingly did not explain the reason for said shortage. He has further submitted that it was a mere accounting error which could not be explained to the visiting officers on 24/07/2008 but in their reply the said quantity was duly accounted for. Hence there is no suppression, mis-statement or mis-declaration and accordingly imposition of penalty under Section 11AC read with Rule 15 of Cenvat Credit Rules is unwarranted. The Ld. Advocate submitted that the Ld. Commr. (Appeals) has erred in placing reliance on the judgment of Hon ble Supreme Court in the case of Union of India Vs. Rajasthan Spinning and Weaving Mills Ltd.- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id the duty on the said shortage. Show Cause Notice was issued after a period of ten months proposing penalty on the appellants. I find in their reply, the appellant had explained and accounted for the shortage of inputs noticed by the officers during the stock verification on 24.7.2008. The said explanation was neither verified nor challenged by the Department. I find that adjudicating authority had brushed aside the said explanation as an after thought observing that such claim was made only on 6/6/2009 while replying to the show cause notice. I find that the said reasoning of not accepting the explanation of the Appellant cannot stand the scrutiny of law. The explanation furnished by the appellant are based on records which should have b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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