TMI Blog2005 (2) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... bstantial force in the submissions of the learned Advocate that the standard input output norms can be applied only in perfect conditions and not otherwise. In a similar situation in the case of Magnum Papers Ltd. (supra), the Tribunal did not agree with the Department that Modvat credit is deniable on the basis of comparison of the consumption of the raw-material during the current year and the preceding year. In the present matter also, the shortage of nylon tyre cord fabric has been only presumed on the basis of applying input output ratio and not on the basis of actual consumption. We, therefore, set aside the demand in respect of nylon tyre cord fabric. The penalty is imposable on the appellants on account of shortage of tyre which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout the receipt of the goods to the person managing the R.G. I register and the same is accordingly recorded in the R.G. register; that, therefore, the goods in the packing section should also have been taken into account at the time of verification made by the Central Excise Officers on 18-7-1998; that as the Officers had not taken into account the finished tyres lying in the packing section, there is no shortage and no duty is payable on nylon tyre cord fabric. The learned Advocate submitted that the shortage has been alleged only on the basis of comparing the actual consumption with the standard input output ratio; that no norms have been fixed under Rule 173E by the Central Excise authorities for the consumption of nylon tyre cord fabr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted the shortage of 602 tyres in BSR; that, further the entries are made in R.G. I register after goods have been kept in bonded store room and not when they are still lying in the packing section; that, besides the shortage of nylon tyre cord fabric, the Officers had also found shortage of other raw-materials, i.e., synthetic rubber; that the appellants have immediately paid the amount in respect of shortage of synthetic rubber; that only on the basis of norms provided by the appellants, the Officers came to the conclusion that there was shortage of 8.159 MT of the nylon tyre cord fabric; that the Officers had also not found any excess consumption of carbon black and synthetic rubber; which goes to show that the nylon tyre cord fabric fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar situation in the case of Magnum Papers Ltd. (supra), the Tribunal did not agree with the Department that Modvat credit is deniable on the basis of comparison of the consumption of the raw-material during the current year and the preceding year. In the present matter also, the shortage of nylon tyre cord fabric has been only presumed on the basis of applying input output ratio and not on the basis of actual consumption. We, therefore, set aside the demand in respect of nylon tyre cord fabric. The penalty is imposable on the appellants on account of shortage of tyre which has been upheld against them. However, the penalty cannot be imposed on account of the shortage of nylon tyre cord fabric. We, therefore, reduce the penalty to Rs. 25, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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