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TMI Blog2016 (2) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... ock of MS Ingots was found and in the stock of sponge iron 257.150 MT (raw material) shortage was found. A statement of Mr. Neeraj Kumar, Chief Accountant was recorded on the same day. As regards the shortage or discrepancy found he stated that on production of the MS Ingots, entry is made on estimated weight in the stock records. But at the time of sale, actual weight is the basis. He further stated that in view of the manner of stock verification adopted, wherein few sample ingots were weighed and the average weight of one ingot was multiplied with the number of ingots, hence, there is bound to be variation. Similarly, as regards shortage found in the stock of sponge iron, it was stated that for the manufacture of ingot sponge iron is use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeared that the appellant availed Cenvat credit in respect of goods received from M/s. TEVA API India Ltd., Gajraula (100% EOU) in violation of Rule 3(7)(a) of the Cenvat Credit Rules, 2004. It further appeared that the appellant had debited Customs duty of Rs. 6,74,218/- vide debit Entry No. 1259, dated 21-3-2012 and also reversed the credit taken of Rs. 58,070/- on account of education cess etc. on 21-3-2012. The credit taken on the invoice of Teva Api India Ltd. of Rs. 76,619/- was also reversed vide the debit Entry Number 1261, dated 21-3-2012. It is further observed in the SCN that further investigation on this issue was not taken in view of the unconditional reversal of Cenvat credit by the appellant assessee. It is further observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be recorded which has also resulted in variation with the records. It was further contended that there is no instance of any clandestine removal and only for the apparent shortage in stock, no adverse inference to the effect that there is clandestine removal/clearance could be drawn. So far sponge iron is concerned it was mentioned that in the course of handling the sponge iron, bags are damaged and as such loose sponge iron is also lying scattered on the floor of the factory. Although a small quantity of 0.022MT have been considered as loose quantity of sponge iron but the same does not reflect the actual stock lying scattered. So far Cenvat credit wrongly taken is concerned it was stated that the same is a matter of clerical error by Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f inspection the appellant had issued 74 MT of sponge iron and 10.680 MT iron scrap for production and there was production of 74 MT of ingot and 2.220 MT of runners and risers, while arriving at the stock position on 20 March, 2012 the officers had not taken into account sponge iron issued for day's production. If considered along with the stock of sponge iron in the factory, there would be hardly any discrepancy. It is further stated that no penalty is exigible on the facts and circumstances and the whole allegation of clandestine removal is based on assumption and presumption and there is no finding of any actual removal of any goods clandestinely. Further, in view of the admission of the mistake in taking Cenvat credit and the same havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Cenvat credit reversed is concerned, following the ruling of Hon'ble Karnataka High Court in the case of CCE, Bangalore v. Bill Forge Pvt. Ltd. - 2012 (26) S.T.R. 204 (Kar.) = 2012 (279) E.L.T. 209 (Kar.), I hold that interest is not payable on the amount of credit so, reversed which was not utilized before reversal. Accordingly I remand to the Adjudicating Authority on this. If it is found that the appellant have utilized any part of Cenvat credit, during the period the credit was lying available, interest for such user will be payable. Thus, the appeal is allowed and the impugned order is set aside as indicated above except the question of interest payable on the Cenvat credit reversed which shall be verified as directed, and interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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