2010 (3) TMI 527

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....following substantial questions of law : (1) Whether the CESTAT order is legal and correct in setting aside the impugned order No. 10/2004 dated 27-8-2004 on the ground that the discrepancy was only in SAP accounting and not in manual accounting? (2) Whether the CESTAT is right in holding that the manual accounts should prevail over accounts in electronic form, SAP in the present case? (3) Whether CESTAT is right in arriving at a decision when the value of the shortages was set off in their annual accounts as an expenditure? 2. Facts leading to this case are as hereunder : The respondent-assessee company is engaged in manufacture of various types of metal cutting tools, metal forming tools and machine tools falling under Chap....

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.... original authority. Thereafter, an order was passed calling upon the assessee to pay duty and penalty. Being aggrieved by the order, assessee filed an appeal before the tribunal. Revenue also filed a separate appeal in regard to the relief granted by the Commissioner in reducing the duty and penalty payable in terms of the payment made in the show cause notice. Both the cases were heard together. Tribunal after hearing the parties came to the conclusion that the adjudicating authority has come to the conclusion that the difference in regard to the excess or shortage would be about 2% and that no physical verification of stock was taken and on the ground that there may be chances of error in accounting system when the entire system is compu....

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....r cannot exceed 2% and in the instant case actual difference of the goods manufactured found at the time of inspection based on the documents was not exceeding 2%, therefore he contends that the tribunal was justified in granting the relief and he further contends that the questions of law raised in the present appeal does not arise at all as the actual dispute is based on the facts on account of the error occurred in electronic method of accounting. In the circumstances, he requests the court to dismiss the appeal. 7. Having heard the counsel for the parties, we have noticed that the assessee is maintaining accounts in an electronic method which is known as SAP Accounting. It is also not in dispute that the physical verification of the ....