Customs, Excise and Gold Tribunal - Delhi
U.P. Alloys Pvt. Ltd. vs C.C.E. on 1 March, 2007
Equivalent citations: 2007(120)ECC209, 2007ECR209(TRI.-DELHI), 2007(213)ELT412(TRI-DEL)
ORDER
S.S. Kang, Vice President
1. The appellant filed these appeals whereby demand was confirmed and penalties imposed in respect of the inputs regarding which credit has been availed. The appellants are engaged in the manufacture of M.S. Ingots and Sponge Iron. On the date of visit, the weighment of raw-material was conducted and it is the case of the revenue that there was shortage of 75 M.T of sponge iron and demand is raised in respect of duty on this shortage as appellant availed credit of the same.
2. The contention of the appellant is that certain quantity of sponge iron was in loose condition lying in the factory and no weighment was done before arriving at the actual quantity of sponge iron which was physically present in the factory. The contention is that in the SCN, the case of the revenue is that weighment of sponge iron was done on eye estimation basis. The contention is that exact quantity of shortage or excess cannot be based on eye estimation, therefore, demand is not sustainable.
3. The contention of the revenue is that certain quantity of sponge iron was packed in bags and one bag was weighed and the same comes to 50 kg. and the weight of sponge iron which was in the bags, was counted by multiple the number of bags into 50 kg. Therefore, it cannot be held that shortage was on eye estimation, however, in respect of loose quantity present in the factory. The contention is that the same was arrived at on eye estimation and the same was admitted by the appellant. Therefore, the demand is rightly made.
4. The case of the revenue is that there was shortage of 75 M.T. of sponge iron which is the raw-material and on which credit has been availed. In the SCN, it was specifically mentioned that some quantity of sponge iron is packed in the bags and one bag is weighed and the same was found to be of 50 kg. However, the weight of loose sponge iron was done on eye estimation basis, which was estimated as 35.465 M.T. In view of this admitted fact that no weighment was done in respect of loose sponge iron lying in the factory and the weight of loose sponge iron was done on eye estimation basis. In this factual position, I find merit in the appellant's contention that the demand cannot be raised on the basis in respect of the quantity which was arrived at on the basis of eye estimation. Therefore, the demand is set aside and consequential penalties are also set aside. Appeals are allowed.
Order dictated in the open Court.