TaxTMI 
TaxTMI 
2003 (6) TMI 315
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.... 2. Ms. Charu Baranwal, learned Senior Departmental Representative, submitted that the respondents manufactured organic chemicals and availed of Modvat credit of the duty paid on inputs and during the course of checking of the factory premises of the respondents on 7-4-99, the Central Excise officers recovered a computerized sheet from the room of Shri M.L.N. Srinivas, Senior Vice President of the respondents which showed that there was shortage of 1,15,218 Qtl. of molasses stock as on 29-3-99; that the Senior Vice President in his statement dated 8-4-99, deposed that he did not exactly know the reason for the said shortage in the molasses account; that however, he debited the amount on account of shortage of molasses under protest. ....
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....oning; that during reprocessing of the duty paid goods, processing losses about 8% used to occur; that however, the respondents had been returning back the total quantity to their customers after reprocessing without payment of duty; that Shri Srinivas had accepted in his statement dated 8-4-99, that the respondents were in fact, after reprocessing, replacing goods with new ones; that as the respondents had replaced the goods, the benefit of Rule 173H would not be available to them; that in the Panchnama it was mentioned that there was processing loss during the reprocessing/reconditioning, which goes to show that there was loss in the quantity received back by the respondents. 3. On the other hand Shri M.P. Dev Nath, learned Advoca....
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....n of physical stock of molasses and did not find any discrepancy. 4. We have considered the submissions of both the sides. As far as 8% loss on account of reprocessing of duty paid goods is concerned, we find that nothing has been brought on record by the Revenue to show as to how this 8% loss has been arrived at. The Commissioner under the impugned Order has not confirmed the demand for want of any evidence on record to substantiate the figure of 8% as processing loss. We do not find any infirmity in the findings of the Commissioner as there is nothing on record to substantiate the charge of loss of 8% during the course of reprocessing of duty paid goods. The entire case of the Department in respect of shortage of molasses rests on....
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....e charge in the SCN that the credit Rs. 57,60,900.00 was taken by adjusting RG 23A Pt. I is not tenable. (ii) The panchanama dated 7/8-4-99 do not mention about stock taking of the molasses on 7/8-4-99, as such it is not on record as to what was the Physical Stock position of molasses vis-a-vis the book balance i.e. RG 23A Pt. I balance and whether there was any shortage or excess in stock of molasses on 7/8-4-99. The party have strongly pleaded that the visiting officers conducted stock taking of molasses but did not put it on record as there was no variation. They have even submitted affidavit of Shri S.L. Garg, General Manager, Distillery, of Vam Organic Chemicals Ltd. to this effect. (iii)....