TaxTMI 
TaxTMI 
2013 (9) TMI 692
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....eceived by them, interest was also sought to be recovered from the appellants and penalty was proposed on appellants and co-appellants. The said show cause notice was adjudicated vide O-I-O No. 57/Addl.Commr./VAPI/OA/2003 dated 15-3-2004 against which the appeal was filed by the appellants with the Commissioner (Appeals) who remanded back vide OIA No. MCRS/126, 127 & 128/VAPI/2005, dated 24-3-2005. Accordingly, the case was re-adjudicated by adjudicating authority in de novo proceedings and he confirmed the demand of the duty, recovery of cenvat credit on the materials received short and also ordered to recover central excise duty on the waste yarn cleared under various central excise invoices, holding that there was under invoicing, imposed penalties under Section 11AC and also under Rule 173Q of the Central Excise Rules, 1944 confirmed the demand of interest at an appropriate rate on the duty liability and also imposed personal penalties on the managing director and the manager-cum-authorised signatory of the appellant company under the provisions of Rule 209A of the erstwhile Central Excise Rules, 1944. Being aggrieved by such an order, all the appellants preferred appeals befor....
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....0 MT. It is his submission that the permissible tolerance limit under the Weights & Measures Act and the Rules made thereunder was approximately 1%. It is his submission that the Larger Bench of the Tribunal in the case of Bhuwalka Steel Industries Ltd. - 2010 (249) E.L.T. 218 (Tri.-LB) and Ispat Industries Ltd. - 2012 (275) E.L.T. 235 (Tri.-Mumbai), it has been held that weighment differences within tolerance limits should be ignored. (c) As regards demand of duty of Rs. 3,86,476/- on waste yarn cleared by the appellant by undervaluing the excise invoice, it is his submission that the said demand has been confirmed on the basis of entries made in a private register and an approval letter dated 5-5-1997 by the purchase manager and the statements of company officials. It is his submission that except for the said two evidences, there was no corroborative evidence to prove that the goods i.e. waste yarn was sold at a higher value than that shown in the invoices. It is his submission that no statements either inculpatory or exculpatory was recorded of the recipients of the consignments despite there being details of the said persons on the invoices as regards their name and addresses....
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....nd accepted. It is his submission that such shortage even if it has to be considered as 0.060%, there are still finished goods and it is the liability appellant to account for the same properly in his books of account. As regards the demand of the shortage of the inputs, he would submit that the appellants themselves have accepted the shortage by lodging a claim with the supplier of the goods. He would accept the fact that the appellants had paid/reversed an amount of cenvat credit taken on 28MT of shortage which has been accepted by the supplier but would submit that the shortage of 42MT having been admitted, appellants could not be allowed to take the cenvat credit on such quantity received short. It is his submission that as regards the demand of duty on the clearance of waste yarn, he would submit that there is no dispute as to the collection of an amount in excess of the amount which was shown in their invoices. It is his submission that the managing director as well as the manager-cum-authorised signatory has accepted that the private notebook which has been seized during the visit of the officers was in fact maintained by them. It is his submission that there is no dispute a....
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....essee has not claimed any wastage during the earlier period but on being detected, claimed that the said wastage is 0.060% of the finished goods manufactured in the year 1998-1999. In our opinion, this claim of the assessee does not have any firm legal backing, is without any substance, as the appellant himself should have reconciled the stocks earlier and could have informed the department as regards the shortages. Having not done so, it is too late for the appellant to stake the claim of loss, being than 1% of the total finished goods manufactured. Accordingly, we find that appellant has no case as regards confirmation of the demand of Rs. 66,240/- on the shortage of finished goods POY. We uphold the impugned order to that extent and reject the appeal of the assessee on this point. (ii) Demand of Rs. 4,78,800/- on the inputs i.e. polyester chips short received. It is admitted that the appellant is purchasing polyester chips from M/s. Indorama Synthetics (I) Ltd. It is also admitted that there was a shortage of 70MT. The claim of the appellant in this case is that it was due to weighment differences and it was not a question of inputs not received. We find that it is substantiat....
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.... has claimed compensation for the shortage of goods either from the supplier or from the transporter or the insurer of the cargo. 13. All these factors listed above and any other relevant factor has to be kept in view in deciding any particular case as to whether the entire consignment has been received at the end of the recipient assessee without any diversion. Tolerances in respect of hygroscopic, volatile and such other cargo has also to be allowed as per industry norms excluding, however, unreasonable and exorbitant claims. Similarly, minor variations arising due to weighment by different machines will also have to be ignored if such variations are within tolerance limits. In our view, each case has to be decided according to merit and no hard and fast rule can be laid down for dealing with different kinds of shortages." In our view, the above factors if applied in the current case, we find that there is no diversion of the inputs enroute and there is also no findings of clandestine diversion/sale of inputs. The losses which have been claimed by the appellant was claimed to be on weighment differences, which is not contested seriously by the Revenue, as both the lower authori....
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....cessfully discharged by the respondent by producing valid invoices and certificates from the Legal Metrology Department and independent Chartered Engineer. They could establish that the variations in weight of HR coil between the invoices and the "HR Coil Receipt Register" were within the tolerance limits prescribed for the weighbridges under the SWM (General) Rules made under the SWM Act and, therefore, the entire quantity of material covered by the invoices was received in the factory and used in the manufacture of the final product. Again, no doubt, the rules governing availment of MODVAT/CENVAT credit are mandatory as held by the High Court in Nicholas Piramal case. At the same time, it cannot be ignored that Parliament recognized the possibility of occurrence of error in weighment on weighbridges and accordingly provided for prescription of different tolerance limits for weighbridges of different capacities. These limits were prescribed under the SWM (General) Rules, 1987. Insofar as metallic materials like HR coils are concerned, which are brought in truckloads or lorryloads to a factory, the same have got to be weighed on weighbridges. In this event, the error factor of the ....
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....received in excess also clearly indicates that the appellant has not under invoiced to the tune of Rs. 10.5 per kg. as has been indicated in the letter. We also find a strong force in the contentions raised by the ld. counsel that despite there being name and address of the consignees on the invoices, no statements have been recorded by the lower authorities from these consignees, to conclusively prove that the appellant had received excess amount from them. 10. Be that as it may, since there is existence of the private notebook, which indicates an amount received in excess of the amount which has been billed in the corresponding invoices, we find that such an amount received by the appellant in excess of the amount billed needs to be confirmed and considered as an additional consideration received by them and needs to be taxed. Accordingly, accepting the responsible statement of the ld. counsel that the total excess duty on such differences will be approximately Rs. 48,876/- after considering the payment of central excise duty by the appellant on the invoices, we find that this amount of duty which has been not paid by the appellant by undervaluing the yarn waste needs to be conf....