2017 (11) TMI 754

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..... ioner. The assessee is a manufacturer of Ball Bearings and Axle Boxes liable to Central Excise duty. Assessee are availing cenvat credit of inputs and capital goods. They manufactured wide varieties of Ball Bearings and claimed to deal with 1,40,000 different types of raw materials, work-in-progress goods, finished goods, stores and supplies taken together. The Assessee conducted audit of their inventory of all items namely inputs in stock, goods-in-process, and finished stock. During the course of such verification, they found certain shortages and certain excesses in respect of various inputs as well as finished goods. 3. Based on the report of the assessee's auditors, the Revenue conducted certain inquiries and proceeded against them to .....

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..... p of cost auditor stock verification on annual basis to reconcile the inventory position. In such a situation it is but natural that minor variation (0.5% and below) do occur during reconciliation. The explanations provided by the assessee during the original proceedings have been accepted by the lower authority and he allowed the possibility of shortages and excesses in respect of various individual category of raw materials and finished goods. However, he confirmed the reversal of credit in respect of raw material found short after netting of excess with shortage among various varieties. Same method has been adopted for finished goods also. We find that the shortages and excesses found during physical stock verification which remained un- .....

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..... and 42 of the impugned order. The Revenue's plea is that verification should have been done by the officers before the Commissioner allowed such adjustment. We find that the physical inventory was in fact done by the assessee and the Revenue came into the picture much later. In any case, the nature and possibility of accounting error not being denied the adjustment as ordered by the Commissioner on the clear reasoning cannot be faulted. We find that remand of the case on this ground will not serve any purpose. In any case the assessee's appeal having been allowed we find no further reason for remand. 7. Considering the above discussion and findings, the appeal filed by the assessee is allowed with consequential relief, if any. Revenue appe .....

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