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1994 (5) TMI 72
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....rse of physical verification of stock by the Central Excise Preventive Staff, Ludhiana, it was found that there was an excess stock of steel ingots weighing 10.094 M.T. valued at Rs. 77,723.80 involving Central Excise duty of Rs. 5,299.35 over and above the recorded balance in the R.G.-1 register. The above excess stock was worked out on average basis after taking into account the weight of 100 steel ingots which was agreed upon between the Director of the appellants' firm and visiting staff to ascertain the weight of one steel ingot, the weight of 100 steel ingots may be got done at the weigh-bridge of Kalyan Agro Industries as there was no weighing arrangement in the factory. As a result, the average of one steel ingot came to be 85.4 Kgs....
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....the Department was not right in arriving at the conclusion that there was shortage based upon average weight. The actual weighment of total stock lying in the premises would have been done since average weight can never represent actual weight and some difference is inevitable for average weight and fair and reasonable tolerance limit is to be taken into consideration and since it is only 9.1% of the record balance it can be treated as normal and within the reasonable limit of tolerance. As regards MODVAT credit he submitted that MODVAT credit cannot be denied since steel flats and cuttings are nothing but scrap and the same has been used in the manufacture of excisable goods and difference of opinion about headings of cuttings should not r....