TaxTMI 
TaxTMI 
2008 (9) TMI 663
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.... to enable them to associate themselves with such stock takings. It was revealed that as a result of the stock takings in respect of certain finished products, there was excess and in respect of pig iron for all the four years, there was shortage. The duty payable on the shortage of pig iron had been worked out for the three years. In view of this, the Revenue proceeded against the appellant by way of issue of show cause notice demanding duty amount of Rs. 76,21,639/-. The Adjudication proceedings were conducted. The learned Commissioner after considering all the points raised by the appellants, confirmed the duty under Proviso to Section 11A of the Central Excise Act. Interest was demanded. Equal penalty under Section 11AC was also imposed. As regards the excess stock in respect of the various products, it was ordered that they would be taken into the RG 1 account and would be cleared on payment of duty. The appellants are highly aggrieved over the impugned order. They have made several submissions and they have also relied on the various case-laws. It was contended that the appellants are following different methods for accounting the production, accounting the clearance to the p....
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....t the debit should be raised against on the day when the actual clearance takes place. It should, therefore, be ensured that sufficient balance is maintained in the PLA to cover the duty due on the goods cleared. (ii) Machine numbering on dispatch-cum-invoices used in lieu of gate passes : Since invoice-cum-despatch advices in the case of steel plants have been accepted as valid excise documents in lieu of gate pass, they are required to be serially numbered under the rules. Steel Plants have represented their difficulties in serially numbering the invoices, as these are computerized. It has however, been explained by Steel Plants that the dispatch advices from their mill shops to the central point bear serial numbers. In view of this, it has been decided that machine serial numbers need not be insisted upon on invoice-cum-despatch advices. (iii) Production account and maintenance of RG-1 : It has been observed that different practices are being followed in the Steel Plants in the matter of accounting their daily production. After carefully considering the matter, it has been decided that the account of production maintained ....
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....lated weight, the variations between the quantities finally cleared and the initial account should be viewed by Central Excise Officers in their proper perspective. However, the Commissioner has not accepted the explanation of the party on the ground that they had not intimated the Central Excise Officers in terms of the Board's in Section the appellants are required to inform the Central Excise officers so that they could also participate in the stock taking exercise, this has not been done. This is a lapse, but for this purpose in our view demanding duty and imposition of heavy penalty is not at all warranted. In any case, the invocation of the longer period is not justified. We cannot say that one of the largest public sector undertakings Rashtriya Ispat Nigam is doing all these things with an intention to evade payment of duty. Further, this Bench had occasion to deal with similar issues in the following cases : (a) Steel Authority of India Ltd. v. CCE, Mysore - 2006 (200) E.L.T. 229 (Tri.-Bang.) where a similar situation was examined and it was decided that the shortage is inflated due to errors in taking opening balance and a physical stock. It is a....
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....o theoretic weight based on sectional weight. A comparison between two estimation is inherently inaccurate. Losses like cutting, grinding and milling, scale loss after heat treatment and straightening, reprocessing after inspection at various stage of manufacture are not recorded in RG-1. Rejections are not recorded while accounting for quantity produced or issued in the form of sections and ingots. Shortage is inflated due to errors in taking opening balance as on 1-4-1998 and physical stock on 31-3-2001. Considering the practical difficulties, in estimating the actual stock and in view of the submissions made by the appellants, we find that the demand of duty made by the adjudicating authority cannot be sustained. Therefore, we allow the appeal with consequential relief." (b) Similarly in the case of Widia India Ltd. v. CCE, Bangalore -2007 (207) E.L.T. 562 (Tri.-Bang.) similar decision was taken. In the case of Steel Authority of India Ltd. v. CCE, Bhubaneswar - 2001 (47) RLT 343 (CEGAT- Kol.) it was held that allegation of clandestine removal based on difference in figures of production and clearance given in the annual financial accounts and RG-1 can....