TMI Blog2015 (11) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... .704 MTs. It is surprising that such a huge shortage which works out to almost 73% was not noticed by the melter or by the Managing Director or by the Central Excise in-charge over a period of 4 years. This itself shows that in spite of the huge difference between the actual raw material available and the stock as per the Register, the assessee did not take any steps whatsoever to check whether the accounting is being done correctly or not. The method adopted by the assessee for maintaining consolidated raw material account itself is a strange method of accounting. It was also admitted that from July 2008 onwards they were not even maintaining the record of use of raw materials on which cenvat credit has been taken. The claim that raw m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Final Order No. 21458 / 2015 - Dated:- 28-5-2015 - Mr. G. Raghuram, President And Mr. B.S.V. Murthy, Technical Member For the Petitioner : Mr. G. Natarajan, Advocate For the Respondent : Dr. L. Dendem, AR ORDER Per: B.S.V. MURTHY The appellant manufactures MS Ingots falling under CETH 72061090 of the first schedule to the Central Excise Tariff Act 1985. They were availing cenvat credit of central excise duty paid on inputs viz. Sponge iron (in lumps and in granules form) Pig iron in granules form, PCM Jam, MS Scrap etc. besides availing cenvat credit of central excise duty paid on capital goods and service tax paid on input services. Surprise stock check of the appellant s factory was conducted on 25.11.2008 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was much more. He draws our attention to the technical opinion of expert and submitted that the burning loss can be around 25%. 4.Further he submits that right from the beginning this has been the contention of the appellant. There is no evidence of any diversion of raw-material and officers have not produced any evidence to show the sale of raw-material or the finished products clandestinely. In the absence of any evidence to show sale of raw material as such or sale of finished products without payment of duty, the demand cannot be sustained. He draws our attention to the revised work sheets submitted by them right from the year 2003-04 to 2008-09 (November) and submits that if the correct burning loss is taken into account, there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was also admitted that from July 2008 onwards they were not even maintaining the record of use of raw materials on which cenvat credit has been taken. The accountant had stated that he was maintaining the account on the basis of report of the smelter who was giving the details of consumption of raw material and production of finished goods. Shri Vijay Kumar the melter stated that they used to charge thousand Kgs of scrap and thousand Kgs of Pig iron and balance was filled with sponge iron. The capacity of the furnace is 5 tonnes. He also stated that the stock available on 25.11.2008 was sufficient for 30 to 40 heats. If the melters submissions are taken into account, the total stock comes to only about 200 tonnes which shows that even th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis of consumption register submitted by the assessee and the raw material records, departmental officers arrived at raw material waste shortage and found that shortage could be attributed to only to raw-materials viz. Sponge iron (1671 tonnes) and PCM jam (1.33 MTs). The calculation for demanding duty also has been made on this basis only. It is the appellants claim that the quantity of loss is only 3.78% compared to the total quantity received by them over a period of 5 years. However this is not a proper method of looking at the stock. What is to be seen is what was the difference between the closing balance and the stock available at the time of verification and when there is a huge difference it shows that the appellants had not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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