Reversal of ED on shortage of input during stock taking

[Pradeep Jain]

Dear Sir,

We are manufacture of Engines and Transmissions. For the production of the same approximate 1000 components consumed and there are multiple processes.  At the end of financial year physical stock was taken however there is shortage in physical stock and stock as per stock ledger.

It may due to non-booking of rejection on regular basis. Moreover we have been selling scrap on payment of Excise Duty. Please support with case law or section/rule.

Now query is that:-

 

Due to   Shortage in stock , during  annual stock taking , although there no physical movement of this inputs, Do we need to reverse Excise duty thereon ?

In such case there is judgement in the matter of Maruti Ltd.- according to that stocking is an accounting process and since there is no physical movement of goods therefore , no need for reversal  of Excise Duty( not having the copy , if possible please provide).  Is this case applicable on our Company also?.

Kindly reply

Best Regards

Pradeep Jain

AI Summary

Manufacturing Company Questions Need to Reverse Excise Duty on Stock Shortage, Citing Maruti Ltd. Judgment for Guidance A manufacturing company faced a discrepancy between physical stock and stock ledger during annual stock-taking, possibly due to unrecorded rejections. Despite selling scrap with excise duty, they questioned whether they need to reverse excise duty on the shortage, given no physical movement of inputs. They referenced a judgment involving Maruti Ltd., which suggests no need for reversal as stock-taking is purely an accounting process. They sought confirmation on the applicability of this case to their situation. The response referenced a similar case, Greaves Cotton Ltd. vs Commissioner of C. Ex., for further guidance.