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TMI Blog2016 (3) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... and the other appellant, Shri Vipin Bajaj, is the authorized signatory of the Party under the provisions of Central Excise. They are in appeal against common order in appeal dated 16/3/10 by which the denial of Cenvat credit on capital goods have been confirmed, as well as demand by way of reversal of Cenvat credit on the stock of raw materials found short, have also been confirmed, whereas penalty for shortage have been set aside confirming the penalty on the Cenvat credit disallowed on capital goods along with further penalty of Rs. 50,000/- under rule 26 of Cenvat Credit Rules, 2002 on Mr.Vipin Bajaj. 3. The brief facts are that the enquiry was conducted on 24/7/2007 in factory premises of the appellant wherein the stock of raw materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nspection of authorised signatory, who has admitted the shortage stating that the shortage may have occurred due to error by the employees of the Company. However, he agreed to deposit the duty amount of Rs. 1,08,484/. Rejecting the contentions of the appellant as an afterthought, the proposed demands were confirmed along with interest and further, penalty was imposed of Rs. 10,84,107/ & 1,08,484/- on the appellant company under Rules 15 (1) (2) of Cenvat Credit Rules, 2004 read with Section 11 AC of the Act and further penalty of Rs. 50,000/- was imposed on Shri Vipin Bajaj under Rule 26 of the Central Excise Rules, 2002. 5. Being aggrieved, the appellant preferred appeal before ld. Commissioner (Appeals), who was pleased to confirm the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... error of law in allowing the benefit of modvat credit when the same was not admissible in terms of Rule 57R (8) of Central Excise Rules, 1944 and further, there was no such alternative provision under the rules to accept the subsequent withdrawl on account of revised claim filed by the assessee. The Honourable High Court in view of the finding of Commissioner (Appeals) who have verified and noted that the depreciation was not claimed under the fact that claim regarding the depreciation was withdrawn, held that the Cenvat credit was available. The ld. Counsel also relies on the ruling of Bombay High Court in the case of CCE versus Maharashtra Electro Smelt Ltd. 2008 (224) ELT 391 (Bom) wherein under similar circumstances, that the depreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, if not supported by any other corroborative evidence. In this regard, they have placed reliance on various case laws mentioned supra. After considering the facts, I notice that the appellant No.2 had retracted the statement on 25th July, 2007 that were recorded on 24th July, 2007 in a letter addressed to the Commissioner, wherein it has been claimed that there was no shortage in the raw material and also that the method of stock taking was faulty as the same was conducted on eye estimation basis. In this regard after examining the statement, the panchnama and the physical stock verification report, I notice that the appellant No.2 had admitted the fact of shortage not only in presence of the officers but, also in presence of two independ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, the corroboration with some tangible evidences is must otherwise, the theory of clandestine removal shall fail. In this case also, the department had tried to allege the clandestine removal only on the basis of statement whereas other evidences are absent. I observe that the adjudicating authority has not mentioned any reason as to how he arrived at such conclusion of clandestine removal of finished goods and the contravention of provisions of Act & Rules although it is a settled law that clandestine removal is a serious charge, which is required to be discharged by the department by production of sufficient and tangible corroborative evidences. It implies that there has to be some evidence in the form of sale of finished goods, clande ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Honourable Gujarat High Court and Bombay High Court in the cases of M/s Nish Fibres & M/s Maharashtra Electrosmelt Ltd. (supra) as the appellant have withdrawn the claim of the depreciation, which is an admitted fact, I set aside the denial of Cenvat credit along with the penalty imposed under Rule 15 read with Section 11 AC of the Act. So far the issue of shortage of material is concerned, on perusal of record, I find that the Panchanama is silent on the method of stock taking. It does not disclose the mode of physical verification. Under such circumstances, the contention of the appellant that the stock taking was done by way of eye estimation, is held tenable. I further find that the said objection have not been dealt with in the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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