TaxTMI 
TaxTMI 
2008 (3) TMI 572
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....ses of the appellants on 23-8-2006, the officers of Preventive Headquarters, Central Excise & Customs, Aurangabad conducted the search of the premises and recovered documents pertaining to the manufacture and sale of M.S. Ingots and also conducted stock-taking of the raw material as well as finished goods. On verification, the following discrepancies were noticed. (i) The physical stock-taking of M.S. Ingots has been conducted by counting the number of pieces which comes to 831 nos. The physical weighment of these ingots comes to 78.743 M.T. The M.S. Ingots in small size i.e. end pieces were counted physically which comes to 343 pieces. The weighment of these end pieces of ingots comes to 10.830 MT. Then the ingots of piping nature ....
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....id goods by eye estimation with the consent of the appellants. The details of stock position available in the factory premises were estimated as under : 1 Physical stock of melting scrap(including bazaarscrap) as per eye estimation 686.416 MT 2 Physical stock of sponge iron as per eye estimation 1000.000 MT 3 Stock of Silico Manganese 1 699.786 MT Total 1699.786MT 3. As per book balance in Form IV Register, the stock of raw material was 1759.540 MT. It was noticed that there was shortage of 59.754 MT in the total raw material. The total value of the shortages noticed came to Rs 6,35,006/- on which the Central Excise duty including cess worked out to....
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....reeping in such eye estimation. (a) U.P. Alloys Pvt. Ltd. v. C.C.Ex, Kanpur reported in 2007 (213) E.L.T. 412 (Tri.-Del.); (b) Hans Metals Pvt. Ltd. v. C.C.Ex, Kanpur reported in 2006 (199) E.L.T. 521 (Tri.-Del.). 8. As regards the excess finished goods found, the appellants contention is that the weighment was done on an average basis and there is no way that about 120 MT could have been weighed within a few hours in the weigh scale, which cannot take more than 200 Kgs. Further, the entire stock of the finished goods was found in the factory premises and there was no attempt to make clandestine clearance. Hence, the stock of finished goods found in excess is not liable to confis....
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....ed on the shortages determined on the basis of the eye estimation is not sustainable. I place reliance on the case laws in the case of U.P. Alloys Pvt. Ltd. and Hans Metals Pvt. Ltd. cited (supra) in this regard. 11. The Commissioner (Appeals), vide his impugned order, has given the finding that the shortage in the inputs shows that either the appellants took credit on the strength of the duty paying documents procured by them without bringing in the corresponding inputs or had removed the inputs after taking credit on them - the former one being more likely. I find that this finding is without any basis. The Commissioner (Appeals) has levelled some allegations, which do not form part of the show cause notice. Confirming the demand ....