TMI Blog2005 (6) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Excise officers on 13-8-96, who conducted various checks and verifications. On physical verification of the stock of the main raw material i.e. scrap, the same was found to be 2500 MT. The said verifications of the stock were done in the presence of authorised representative. Subsequently, also two officers of the appellants were associated and the goods were once again verified in the presence of Shri A.K. Biswas, and Shri P.K. Mishra, so as to avoid any discrepancy and it was again found that the total quantity of the scrap available in the appellant's factory was to the tune of 2500 MT. Subsequently, another chance to cross check the stock was given to Shri Dependra Singh, Director of the Company, who in his statement recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The scrap so lifted is only measured by visual inspection and serves as a rough estimate. It was in these circumstances that quantity of scrap short found must have been lost. They also take a hypothetical figure of 4 to 5% towards burning loss which figure may be more than that. The non-recoverable loss is usually 5 to 15%. They also submit that there was no evidence to show clandestine removal of raw materials and the revenue cannot, as such confirm the demand of duty against them. 5. The adjudicating authority did not accept the above contention of the appellants and by observing that the appellants having taken the benefit of the Modvat credit on the scrap, were under a legal obligation to account for the same. No valid explanation h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the raw materials he submits that the same was done not once but twice in the presence of the appellant's representative and the Managing Director of the company was also asked to explain the shortages, on the next day of the visit of the officers. The Managing Director, Shri Deependra Singh accepted such shortages and also agreed to pay the duty. In these circumstances, it is not open to the appellants to challenge the weighment. 8. We have considered the submission made by both sides. The shortages of the modvatable raw materials i.e. MS scrap, as detected by the visiting staff was to the tune of 1638 MT. The total value of the said scrap is to the tune of Rs. 98,28,000/-. The appellant's main contention is that such loss was accumulate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly and undeservedly made by readjustment and if need be, to recover the amount equivalent to such credit wrongly availed of and disallowed by the proper officer. The recovery of credit availed of and utilised in utter breach of the faith and mutual trust and confidence which is the raison d'etre for the proper and successful working of the Modvat scheme and that too in gross violation of the mandatory requirements necessarily to be fulfilled before even claiming or availing of such benefits cannot be said to be the same as the demand for payment to be made under Section 11A of the Act of any excise duty not levied or paid or has been short-levied or short paid. They fall into two distinct and different categories altogether with basic as w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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