9911796707
TMI Blog2018 (1) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... ein after referred to as the assessee and the respondent is referred to as the Department . 2. Brief facts are that the assessee is engaged in the manufacture of MS ingots and also get manufactured CTD bars on job work basis. They are registered with the Central Excise Department. On gathering information that assessees are irregularly availing and utilizing CENVAT credit facility on imported scrap as well as locally procured raw materials, the Preventive Unit visited the factory on16.2.2007 and conducted investigation. The physical stock of inputs and finished goods were verified and officers found shortage of raw materials / scrap. The stock in the book / RG I register and the physical stock showed variations. Statements of various perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... timation. The mahazar contain the weighment details of the scrap. The entire proceeding including the writing of mahazar was completed in just three hours when there was hundreds of tons of stock to be physically verified. He relied upon the decision of the Tribunal in the case of Commissioner of Central Excise Vs. Bajrang Castings Ltd. - 2007 (216) ELT 623 (Tri. Ahmd.) to argue that allegation of shortage of stock by mere eye estimation cannot be the basis for demanding duty. b. The department does not dispute the credit taken in respect of the duty paid on raw materials. There is no allegation of clandestine removal of raw materials or finished products. The only allegation is that at the time of visit, the physical stock estimated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise - 2013 (295) ELT 195 (Mad.). f. It is pertinent to note that the adjudicating authority himself was of the opinion that there is no clandestine removal of inputs or finished goods and at the most it was only improper accounting of inputs. Thus, the adjudicating authority refrained from imposing penalty under section 11AC and imposed penalty only under Rule 15 of CENVAT Credit Rules, 2004. This would go to show that the case of the department alleging shortage of raw materials and irregular availment of credit is without any basis. The ld. counsel relied on the following case laws:- (i) Plastic Duniya Vs. Commissioner of Central Excise, New Delhi - 2005 (190) ELT 381 (Tri. Del.) (ii) Arya Abhushan Bhandar Vs. Union of India - 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has not maintained any worksheet with regard to the unwanted things segregated and the raw materials issued for production. The adjudicating authority has denied the request for cross-examination giving reasons and therefore there is no prejudice caused to the assessee by such denial of cross-examination. He submitted that the adjudicating authority though confirmed the demand has erred in not imposing penalty under section 11AC when there is huge difference between the quantity of raw materials entered in the books and the stock found in the premises. It is clear that there is shortage of raw materials and therefore the adjudicating authority ought to have imposed penalty under section 11AC of the Central Excise Act, 1944. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y has observed that there is no clandestine clearance of finished products or diversion of raw materials. That the only logical conclusion that can be arrived for shortage is the inputs are not properly accounted. For the same reason the adjudicating authority has refrained from imposing penalty under section 11AC of the Central Excise Act. The assessee has put forward a consistent explanation for the shortage, if any, in the quantity of raw materials. They have stated that the scrap contains much unwanted materials like mud, tyre, rubber, plastics etc. That this has not been considered by the adjudicating authority. Further, the assessee had paid duty on the quantity of the inputs / raw materials imported by them. The total quantity of scr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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