TMI Blog2018 (2) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... on such processing loss. Demand of SAD on Customs - Held that: - the appellant contended that they have paid the amount attributable to SAD along with interest and penalty of 25% of the SAD. The appellant is contesting only the demand of ₹ 15,96,309.00 and penalty and interest thereon - the impugned Order is modified to the extent of demand of Cenvat Credit of ₹ 15,96,309.00 along with interest and penalty are set aside. Appeal allowed in part. - Appeal No. E/76885/2016 - Order No. FO/75131/2018 - Dated:- 29-1-2018 - Shri P. K. Choudhary, Member ( Judicial ) Shri K. K. Banerjee, Advocate for the Appellants Sri A. Roy, AC(A.R.) for the Respondent ORDER Per Shri P. K. Choudhary 1. Briefly stated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at from 1988 to October 2007, they used to avail the Cenvat Credit on the inputs received from the Principal QCIL and removed the finished goods on payment of duty. But, from November 2007, the practice was changed in so far as the raw materials supplier M/S QCIL used to send the raw materials under the job work challan (Annexure II) and the job work processed materials were cleared to them without payment of duty under the cover of job work challan. On 26.08.2010, the Central Excise Officers during the audit observation found that the impugned stock lying in the factory of the appellant before switching over to new practice was found to be short. It is further observed that while returning the stock of inputs to QCIL, the appellant failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l filed by the Revenue. The relevant portion of the said decision is reproduced below : 4. The dispute in the present appeal relates to the quantum of lubricating oil which according to the Revenue are not accounted for in quantity of final products of the appellant. Accordingly the demand confirmed by the original adjudicating authority but set aside by the Commissioner (Appeals) by observing that difference on account of loss or shortage were to the tune of 0.44% to 1.78%, whereas tolerance range is between 1.5% to 1%. He also observed that there is no evidence of clandestine manufacture and removal, in the absence of which no duty can be demanded on the waste or loss. 5. On careful examination of the submissions made by both si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nputs of last three years since November 2007 of 4191982 Ltr/Kgs. The processing loss as claimed by the appellant is 100669.15 Ltr/Kgs on which the demand of duty was raised. The percentage of shortage comes to 2.4%. The Tribunal in the above decision allowed the credit on such processing loss. There is no allegation of removal of shortage materials in any manner. The processing loss is inevitable during the manufacture of the finished goods. Thus, there is no reason to deny Cenvat Credit on such processing loss. Accordingly, the denial of credit on the alleged shortage cannot be sustained. Regarding the demand of SAD on Customs, the appellant contended that they have paid the amount attributable to SAD along with interest and penalty of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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