Custom, Excise & Service Tax Tribunal
Cce Aurangabad vs Vir Alloys & Steel Co. Pvt. Ltd on 9 December, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. E/1450/09 Mum
(Arising out of Order-in-Appeal No. AGS(209)76/09 dated 10.09.2009 passed by the Commissioner of Central Excise & Customs (Appeals), Aurangabad).
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
CCE Aurangabad
:
Appellant
Versus
Vir Alloys & Steel Co. Pvt. Ltd.
Respondent
Appearance Shri H.B. Negi, SDR for Appellant None for Respondents CORAM:
Shri. Ashok Jindal, Member (Judicial) Date of Hearing : 09.12.10 Date of Decision : 09.12.10 ORDER NO. This is Revenues appeal.
2. The facts of the case are that the Preventive Team of the Central Excise department had visited to the factory of the respondent and took stock of the finished goods as well as inputs. During stock taking, 151 M.T of inputs were found short which was admitted by the respondent and reversed credit on the same. Thereafter, a show-cause notice was issued for appropriation of the amount of reversal along with penalties on the respondent. Same was adjudicated, duty demand was confirmed and penalty was imposed which was challenged by the respondent before the lower appellate authority who has gone into detail and recorded the contentions of the respondent that on the day of the visit, the factory of the respondent was running, some inputs have gone into manufacture of final products. On that day, the respondent had produced 55.4 M.T. ingots from raw material which has gone into process of manufacture. The said fact was not recorded in the panchanama by over-sight by all the parties i.e. Inspecting team as well as the respondent. The appellate authority has dropped the demand for the inputs which has gone into manufacture of these 55.40 M.T. ingots, thereafter, the shortage of inputs remains 79.67 M.T. The lower appellate authority further dropped the demand on these shortage of 79.67 M.T. on the ground that the percentage of shortage of inputs is near about 0.5% of the total stock of 2812.89 M.T. which weighed physically within a short span of time of 11 Hours. Thereafter, relying on the decision of Ispat Industries Ltd. vs. CCE Raigad 2004 (175) ELT 113 (Tri. Mumbai) wherein this Tribunal has held that there may be tolerance loss which can be allowed upto 1% of the total stock, the demand on shortage of input was also dropped. That order has been challenged by the Revenue before me on the ground that the respondent has not retracted the statement recorded on the date of inspection and when he has accepted the recording of the panchanama and have not agitated any of the defence before the adjudicating authority. He submitted that fact which has been admitted by the assessee need not to be proved. Hence, the lower appellate authority has erred in arriving at the decision of dropping the demand against the respondent.
3. Heard and considered.
4. On careful examination of the submission made by the learned DR and going through the impugned order, I find that it is a matter of fact that on the day of the visit of the factory of the respondent, manufacturing process was going on and in the panchanama the material who has gone for processing was not taken into account. It is also in the fact of the record that on the day of the visit, 55.4 M.T of the finished goods were produced out of inputs gone in working process. Hence, whether the above facts has formed in the panchanama or not, will not give any effects, as it is a matter of fact that some inputs gone into manufacturing. Nobody can deny this fact. Hence, I do agree with the observation of the lower appellate authority that demand of duty on shortage of inputs which has gone in manufacturing of the finished goods of 55.4 M.T is not sustainable. The remaining demand on shortage has been dropped by the lower appellate authority relying on the decision of this Tribunal in the case of Ispat Industries (supra) wherein this Tribunal has held that there should be a manufacturing process loss and it may varies upto 1% in the stock. In fact, in this case, the shortage of stock is near about 0.5%. Hence I do agree with the observation made by the lower appellate authority. In view of the above, I do find no infirmity with the impugned order, the same is upheld. Appeal filed by the Revenue is rejected.
(Dictated in Court) (Ashok Jindal) Member (Judicial) nsk 4