TaxTMI 
TaxTMI 
2013 (4) TMI 247
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....ted and considered. 2. The officers of revenue visited the factory of the assessee on 11-9-2007. The assessee is manufacturing MS ingots from duty paid steel scrap. The assessee was taking cenvat credit on such scrap. During the stock taking, revenue found that there was a shortage of 3.733 MTs of finished goods, namely ingots. They also found shortage of 232.795 MTs of scrap out of the accounted stock of 892.205 MTs of scrap. Revenue made out a case that the excise duty is payable on the quantity of finished goods found short and Cenvat credit is to be reversed when the quantity of scrap found short. Accordingly a show cause notice was issued and adjudicated resulting in confirmation of duty demand to the extent of Rs. 11,382/- on fi....
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....ner (Appeals) who accepted the contention and set aside penalty imposed. However, she confirmed the duty demand. According to the Counsel, if the Commissioner (Appeals) was satisfied that there was no removal that was proved, duty demand should have been set aside. 5. Revenue is in appeal for the reason that Commissioner (Appeals) set aside the penalty. Revenue's contention is that both the duty demanded and penalties are sustainable. Revenue points out that the method of estimation of the goods conducted on the date of visit is recorded to be to the satisfaction of the management of the assessee and they had accepted the shortage on the date of visit and they have in fact paid duty involved also subsequently. At this stage, they cann....
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....rst place is a result of the approximate method of stock taking without any weighment done. Secondly when they feed the raw material into the furnace for manufacturing ingots, material used was recorded only on approximate basis because it is not possible to weigh the quantity of scrap being charged into the furnace in each batch. In such circumstances, errors in estimation of material used in the furnace can lead to such shortage over a period of time. 8. Considering the nature of commodity involved, he submits that such shortage should not be used to arrive at a conclusion that the goods were cleared without reversal of Cenvat credit. He points out that the Revenue has not been able to point any instance of clearance of duty paid go....