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TMI Blog2019 (8) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... Final Order No. 76142/2018 dated March 13, 2018. The Hon'ble High Court has remanded the matter for fresh consideration by the Tribunal upon setting aside the order dated March 13, 2018. 2. The instant appeal has been preferred by the appellant against the Order-in-Original No. 31/Commer/Bol/06 dated November 20, 2006 passed by the Commissioner of Central Excise, Bolpur, whereby the Commissioner has confirmed a duty demand of Rs. 1,61,10,218/- against the appellant under Rule 223A of the erstwhile Central Excise Rules, 1944 (hereinafter referred to as the "said Rules"). The Commissioner has also imposed a penalty of Rs. 2000/- upon the appellant under Rule 223A of the said Rules. 3. The facts in brief of the instant case are as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id Rules and, therefore, the impugned order is without jurisdiction and bad in law. In support of this contention the appellant has relied upon the decision of this Bench of the Tribunal in Rourkela Steel Plant Vs. Collector of Central Excise, 2001(138) ELT 732 (T-Kol) and of the coordinate Bench of the Tribunal at Bangalore in Steel Authority of India Limited Vs. CCE, Mysore, being Final Order No. 1945/2005 dated October 04, 2005 passed in E/55/2003. (ii) In any event, the shortage/excess in the Annual Shortage and Surplus Report having been determined on notional basis, i.e. production figures are calculated on estimated basis on sectional measurement (sectional weight x length x production of pieces) and consumption in the subsequent p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shortage and moreover, from the impugned order itself it would be seen that the demand for alleged shortage of 2982 MT of pig iron for the period 1988-89 had already been raised in a different proceedings. Therefore, no demand of alleged shortage in respect of pig iron for the year 1988-89 can arise or survive in the instant proceeding. Further, consequent to the directions of the Hon'ble High Court, he has submitted reconciliation statements, separately for the financial year 1988-1989, 1989-1990-1991 to gether with the stock taking reports for the said period. On the basis of which, he demonstrated the stock shortage within the permissible limit of 2% prescribed by the Board's circular No. 52/79 CX-6 dated 26.10.1979. 6. On behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Rule 223A of the said Rules, having not ascertained the stock nor being involved with the said annual stock taking by the appellant, the provisions of Rule 223A is inapplicable. Consequently, the proceedings initiated by the two show cause notices under Rule 223A of the said Rules were held without the condition precedent therefor being satisfied. There is thus no stock taking under Rule 223A of the said Rules. Hence, the impugned order and the duty demand confirmed thereby under Rule 223A are also sustainable since the stock taking cannot be held to be under Rule 223A of the said Rules. 7.2. It is also found that there is no denial of the fact that the stocks were ascertained by the appellant on the basis of sectional measurement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dispatch is on actual weighment basis (R.R. Weight). Closing stock is also ascertained on estimation. Shortage arrived at based on estimates. RG-1 is based on estimated production and not based on actual weighment. Physical stock is also based on estimation of weight on the basis of volumetric estimate and conversion to theoretic weight based on sectional weight. 7.4. The relevant portion of the of the order of the Tribunal in Appeal No. E/55/2003 is reproduced below:- " ....5. We have gone through the records of the case carefully. The demand has been issued under Rule 223A covering a period of 13 years from 31.3.1998 to 31.3.2001. The Revenue has issued the show cause notice on the belief that Section 11A is not applicable for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical stock. For example, the RG-1 is only based on estimated production and not based on actual weighment Physical stock is also based on estimation of weight on the basis of volumetric estimate and conversion of theoretic weight based on sectional weight. A comparison between two estimation is inherently inaccurate Lesses like cutting, grinding and milling, scale loss after heat treatment and straightening, reprocessing after Inspection at various stage of manufacture are not recorded in RG-1. Rejections are not recorded while accounting for quantity produced or issued in the terms of sections and ingots. Shortage is inflated due to errors in taking crening balance as on 1.4.1998 and physical stock on 31.3.2001. Considering the practical d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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