What is the impact on qty difference between invoice and weighbridge

[Asked by Guest]

Dear sir,

Kindly provide your expert view on qty difference between invoice qty and weighbridge qty in excise point view. What will be allowed qty tolerance?

Eg: 1. Invoice qty 20000Kg, weighbridge qty 20230kg. Qty excess 230Kg( difference is beyond 1%).

2. Invoice qty 20000Kg, Weighbridge qty 20100. Qty excess 100kg ( difference is within 1%)

[Rajagopalan Ranganathan]

Sir.

Para 11 of Chapter IV of CBEC Manual - Central Excise lays down that "in certain cases, due to non-availability of weighbridges inside the factory, goods have to be loaded in vehicle and weighed outside the factory. The permission may be granted by Deputy/Assistant Commissioner, considering the exceptional nature of goods, for a period of one year at a time. A pre-printed serially numbered Challan may be prescribed, which will be authenticated in advance by the Superintendent or Inspector of the jurisdictional Range Office. The assessee will also maintain a record of such outward and inward movements, indicating date and time. Weighment should be done at the weighbridge nearest to the factory. The challan numbers shall be quoted on invoice. The Superintendent or inspector of the jurisdictional Range office will verify the challans and weighment slips randomly, at least once every month. If nothing adverse comes to notice, the permission may be renewed. Assessee should, however, be advised to install their own weighbridge inside the factory.

You follow the above procedure and ascertain the correct weight and then prepare the invoice. Otherwise you will get into trouble since there is tolerance limit for such variations has been prescribed by CBEC.

[KASTURI SETHI]

Dear Querist, In case you claim more than the prescribed percentage of variation, you will have to pay CE duty on that qty.

[KASTURI SETHI]

Excess difference will not be litigation free. In the case of ACC posted by M/S.YAGAY And SUN, experts in an another query, the department lost the case on this very issue. Each case has different facts and circumstances.

[YAGAY and SUN]

We are amenable with the views of our learned fellows.

[CSSANJAY MALHOTRA]

Dear Siva,

what is the criteria you follow for recording production in RG-1, will be able to comment then. you cant have different yardsticks for RG-1 and issue of sakes invoice. Forget about variation, which may be due to net weight or gross weight ....

[Ganeshan Kalyani]

Good morning Sri Sanjay Sir. We were missing your participation in TMI.

Thank you all for your valuable reply.

@ CS SANJAY MALHOTRA sir, Product is being produced and stored in loose form then packed in bag and loaded in truck. So in RG-1, opening stock, qty manufacture and despatch are account in terms of Mt. Each bag contains 50 kg. if a load of 400 bags is equal to 2mt. Then invoice raised for 2MT and invoice contains no of bags also. Always we ensure qty should not less than 50kg as it is MRP sale. and we ensure excess should not be beyond 1%. in some cases, qty goes beyond 1%. What is the excise implication? should i pay E duty on excess qty beyond of 1%(after deducting allowed weight tolerance-) under the cover of invoice for self consumption? or should i ED alone under miscellaneous category.

[CSSANJAY MALHOTRA]

Dear Mr. Siva,

Note, first of all no tolerance is allowed under the statue. Secondly, Sales Qty can't be more than the qty booked in RG-1 or else RG-1 will have negative stock. Besides this, excess supply if any would be considered as clandestine removal.

I think that your case has more of system issues instead of statutory.

Important is to streamline the system of ensuring the weight at time of packing of bags as CEMENT industry does. Weighbridge has nothing to do with the final invoicing, but gives u indication of excess packing or otherwise and measures to correct the same.

No duty on self consumption as shared by you is to be paid. Stock to be corrected first in RG-1 if the same actually appears to be excess than what is recorded in RG-1.

Dear Ganeshan g,

Thanks. Would be interacting as and when available.

[YAGAY and SUN]

In legal Metrology (PC) Rules, 2011 as amended by Rules 2015, there is a mention of permissible error. Even in Central Excise Law, there are plethora of judgments on tolerance issues. just explore the Google for Tribunal, High Court website and Supreme Court Judgments

[KASTURI SETHI]

Sh.CS Sanjay Malhotra Ji, Sir, Thanks a lot for penetrative interpretation of legal as well as realistic aspects. Your interpretation has enriched my knowledge.

[Ganeshan Kalyani]

In my view legal meteorology rules is not applicable in this case. Thanks.

[Ganeshan Kalyani]

Thanks Sri Sanjay Sir.

[YAGAY and SUN]

Just check my earlier replies on this CEMENT related matters.

[YAGAY and SUN]

For your kind information

Commissioner of Central Excise, Nagpur Versus M/s. ACC Ltd. 2014 (12) TMI 578 - CESTAT MUMBAI

[CSSANJAY MALHOTRA]

My role is to apprise the Industry to ensure compliance and not let them get into litigation. Each case has its own merits and is not squarely applicable to all. Just experience the weight variation penalty and vehicle impounding at various borders in UP and check whether citations help.

It's the querist call to ensure system compliance or opt for litigation following judgements.

[YAGAY and SUN]

No body wants litigation. But Law Develops through litigation as Government makes/drafts Law but Courts interpret the Law. It is why certain legal position settled in/by courts only.

AI Summary

Quantity variance between invoice and weighbridge: may trigger excise duty liability and requires strict weighing and record controls.
Discrepancy between invoice and weighbridge quantities can create excise duty liability when sales exceed RG 1 recorded production. Chapter IV, Para 11 of the CBEC Manual allows authorised outside weighment with authenticated challans, nearest weighbridge use, and range office verification; taxpayers should invoice on ascertained correct weight, maintain records, quote challan numbers, correct RG 1 where necessary, and strengthen packing/weighing controls to avoid allegations of clandestine removal and duty on excess quantities.