TaxTMI 
TaxTMI 
2009 (11) TMI 177
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....nvoices vis-à-vis weighment slips. The learned SDR has relied on the following decisions of the West Zonal Bench (Mumbai):- (i) Bombay Dyeing & Mfg. Co. Pvt. Ltd. v. Commissioner of Central Excise, Mumbai [1999 (113) E.L.T. 331 (Tribunal)]. (ii) Mukand Ltd. v. Commissioner of Central Excise, Mumbai-III [2002 (150) E.L.T. 168 (Tri.-Mumbai)]. In these cases, it was held by the Division Bench that any quantity of inputs not physically received in factory was not eligible for Modvat credit. On the other hand, the learned counsel for the respondents has claimed support from the following decisions of the Tribunal: (i) Neera Enterprises v. Collector of Central Excise, Chandigarh - [1998 (104) E.L.T. 382 (Tribunal)]. (ii) Commissioner of Central Excise & Customs, Aurangabad v. Sipta Coated Steel Ltd. [2000 (125) E.LT. 578 (Tribunal)]. (iii) Mardia Chemicals Ltd. v. Commissioner of Central Excise, Rajkot [2003 (158) E.L.T. 378 (Tri.-Mumbai)]. (iv) Gharda Chemicals Ltd. v. Commissioner of Central Excise, Mumbai-III- [2004 (167) E.L.T. 359 (Tri.-Mumbai)]. (v) Gharda Chemicals Ltd. v. Commissioner of Central Excise....
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....weighed on Bombay Port Trust weighbridge and as weighed on factory weighbridge - Quantity of inputs not physically received in factory not eligible for Modvat credit." (v) Mardia Chemicals Ltd. v. Commissioner of Central Excise, Rajkot[2003 (158) E.L.T. 378 (Tri.-Mumbai)]. - SMC "Short receipt of inputs - shortage too meager - such variation in weight occurs due to weightment at various weighbridges." (vi) Gharda Chemicals Ltd. v. Commissioner of Central Excise, Mumbai-III [2004 (167) E.L.T. 359 (Tri.-Mumbai)]. - DB "After considering the plea made of the fluctuation permissible as per the weighbridge in question as provided under the Standards of Weights and Measures Act, 1976 and the Rules framed thereunder and on perusal of a chart indicating that in all cases the losses were within this permissible approximate 1% error in the weighbridge weighments, it is to be held that the shortages are accounted for. In fact, in some cases the receipt of excess goods have not been objected to which itself goes to prove that the weighbridge, which the appellant was using, was not giving the correct weighment reports." (vii) Gharda Chemicals Ltd. v.....
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....ct, 1976 and Rules made thereunder - Modvat credit admissible." (v) Estee Auto Pressings Pvt. Ltd. v. Commissioner of Central Excise, Chennai-III [2007 (209) E.L.T. 211 (Tri.-Chennai)] - SMC. "Short receipt of inputs due to weighbridge differences - where shortages observed are not significant (within 1 to 2% range) and supplier is not debited for the proportionate price, these quantities not to be considered as short receipt of inputs." (vi) Union of India v. Bhilwara Spinning Ltd. [2008 (222) E.L.T. 362 (Raj.)]. "Having considered the rival contentions, we are inclined to agree with the view taken by the Tribunal that in the facts and circumstances, when it is not in dispute that there is no diversion of the goods covered under the invoices in question and entire goods received under consignment has not been put to any use other than as input in the end product manufactured by the assessee and the transit loss was found by the Tribunal to be normal loss due to evaporation, it must be held that the CVD paid by the consigner/importer was paid in respect of the goods entirely used by the assessee as inputs in the manufacture of end product. ....
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....al Collection of Taxes Act, 1931 (16 of 1931), has the force of law; (vii) the additional duty leviable under Section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v) and (vi) above; and (viii) the additional duty of excise leviable under Section 157 of the Finance Act, 2003 (32 of 2003) paid on any inputs or capital goods received in the factory on or after the first day of March, 2002, including the said duties paid on any inputs used in the manufacture of immediate products, by a job-worker availing the benefit of exemption specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 214/86-Central Excise, dated the 25th March, 1986, published vide number G.S.R. 547 (E), dated the 25th March 1986, and, received by the manufacturer for use in, or in relation to, the manufacture of final products, on or after the first day of March, 2002. Explanation. - For the removal of doubts it is clarified that the manufacturer of the final products shall be allowed Cenvat credit of additional duty leviable under Section 3 of the Customs Tarif....
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.... that the Cenvat credit shall be allowed to be taken of the amount equal to central excise duty paid on the capital goods at the time of debonding of the unit in terms of the para 8 of Notification No. 22/2003-Central Excise, published in the Gazette of India, part II, Section 3, sub-section (i),vide number G.S.R. 265(E), dated, the 31st March, 2003] paid on - (i) any input or capital goods received in the factory of manufacture of final product or premises of the provider of output service on or after the 10th day of September, 2004; and (ii) any input service received by the manufacturer of final product or by the provider of output services on or after the 10th day of September, 2004, including the said duties, or tax, or cess paid on any input or input service, as the case may be, used in the manufacture of intermediate products, by a job-worker availing the benefit of exemption specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 214/86-Central Excise, dated the 25th March, 1986, published in the Gazette of India vide number G.S.R. 547(E), dated the 25th March, 1986, and received by the manu....
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....essee. 14. Considering arguments from both sides and the case laws cited by both sides which have been extracted above, we are of the considered view that different types of shortages cannot be dealt with according to any one inflexible and fixed standard for the purpose of allowing credit under Rule 3(1) of the Cenvat Credit Rules. Decision to allow or not to allow credit in any particular case will depend on various factors such as the following:- (i) Whether the inputs/capital goods have been diverted en-route or the entire quantity with the packing intact has been received and put to the intended use at the recipient factory, (ii) Whether the impugned goods are hygroscopic in nature or are amenable to transit loss by way of evaporation etc. (iii) Whether the impugned goods comprise countable number of pieces or packages and whether all such packages and pieces have been received and accounted for at the receiving end. (iv) Whether the difference in weight in any particular case is on account of weighment on different scales at the despatch and receiving ends and whether the same is within the tolerance limits with reference to the Standard....