TaxTMI 
TaxTMI 
TaxTMI 
2007 (12) TMI 326
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....also challenging a penalty [equal to the sum of the above amounts] imposed on them under Rule 173Q of the Central Excise Rules, 1944 read with Section 11 AC of the Central Excise Act. 2. After examining the records and hearing both sides, we note that the appellants had resisted the proposal to deny the above credit to them, by pleading that there were also excesses of inputs in their factory during the material period. It appears, the adjudicating authority had given opportunity to the party to reconcile the shortages with the excesses. The assessee furnished statements showing shortages and excesses of inputs. In each statement, every input had a material code number. The Commissioner found that the code numbers of inputs in respect....
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....Commissioner and such accounts indicated only 0.35% shortage. Contextually, learned counsel submits that, in similar cases, this Tribunal has condoned such shortages of inputs in the cases of other companies, having regard to the material accounting practice and volume of transactions of such companies. In this connection, learned counsel has relied on the following decisions :- (i) Maruti Udyog Ltd. v. C.C.E., Delhi-III [2004 (173) E.L.T. 382 (Tri. - Del.)] (ii) Hindustan Zinc Ltd. v. C.C.E., Visak [2004 (172) E.L.T. 244 (Tri. - Bang.)] (iii) Denso Kirloskar Indus Pvt. Ltd. v. C.C.E., Bangalore [2006 (195) E.L.T. 102 (Tri. - Bang.)] (iv) C.C.E., Mysore v. TVS Suzuk....
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.... have been removed as such out of the factory. No theft of such inputs was reported at any point of time, nor alleged. The assessees account of shortages of inputs vis-a-vis quantities received in factory was accepted as such by the Revenue. If that be the case, we are at a loss to understand as to why their explanation of shortages cannot be accepted. The assessee claimed set off between excesses and shortages. In support of this claim, they furnished separate accounts also. These accounts have been shown to us today. Learned counsel has invited our attention to a specimen instance in which both shortage and excess were recorded in respect of a particular input. Input of Material Code 150822336500 figures in the account of shortages as wel....
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....Ltd. (supra), the shortage of inputs written off by the assessee in the balance sheet was to the extent of 0.7%. It was held that, when compared to the total quantity of inputs received in the factory, this was negligible and therefore no CENVAT credit was deniable on the shortage. In the present case, by any standards, the shortage is very much within the range found in the above cases. If the entire quantity of inputs received in the factory during the material period is taken, the shortage of issues for manufacture of final product is only 0.66%. If only the duty-paid inputs received in the factory during such period are considered, the shortage is only to the extent of 0.35%. On these facts, we think it would be appropriate to follow th....