TaxTMI 
TaxTMI 
2014 (3) TMI 202
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....g and CR Tubes in respect of which they take Cenvat credit. On 22/2/06 their factory was visited by the Central Excise officers and stock of the Cenvat credit availed raw materials and finished goods was checked in presence of two independent Panch witnesses and Shri Devendra Katiyar, Authorised Signatory. While no irregularity was found in the stock of finished goods, in the stock of Cenvat credit availed of raw materials, there was shortage of 16.750 M.T. of CR sheets, 20.2 MT of HR sheets, 0.416 M.T. of Brass Sheets, 5.5 M.T. of Channels, 5.1 M.T. of C.R. Tube involving of duty of Rs. 2,00,344/-. Shri Katiyar on being asked accepted the shortage, but on being asked to explain the same, stated that the same may be due to improper maintena....
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.... of Channels, 5.1 M.T. of C.R. Tube stands admitted by the respondent, that in spite of this, no satisfactory explanation for these shortages, which are huge, has been given other than stating that the same may be due to improper stock keeping, that the shortage of this magnitude for which no explanation has been given can be only due to clandestine removal of the Cenvat credit availed goods and that in the facts and circumstances of the case, the impugned order waiving the penalty on the respondent under Rule 15 (2) of Cenvat Credit Rules, 2004 readwith Section 11AC of the Central Excise Act, 1944 is not correct. He in this regard relied upon the Apex Court's judgment in the case of Rajasthan Spinning and Weaving Mills reported in 2009 (23....
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....yana High Court in the case of Commissioner vs. H.S. Steels (P) Ltd. - 2012 (286) E.L.T. A178 (P&H), wherein it was held by Hon'ble High Court that merely on the basis of shortages of finished goods, the presumption of clandestine removal cannot be made and this allegation must be backed by same evidence of record. He, therefore, pleaded that there is no infirmity in the impugned order. 4. I have considered the submissions from both the sides and have perused the records. 5. The shortage in the stock of inputs to the tune of 16.750 M.T. of CR sheets, 20.2 MT of HR sheets, 0.416 M.T. of Brass Sheets, 5.5 M.T. of Channels and 5.1 M.T. of C.R. Tube, vis-`-vis their balance in the RG-23A account is not denied. On the contrary the shortage....
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....the same is due to clandestine removal. In case of Cenvat credit availed inputs, if there is huge unexplained shortage, vis-`-vis the balance recorded in RG-23A register, the same can be either due to clandestine removal of cenvated inputs without payment of duty or due to fraudulent availment of Cenvat credit on the basis of bogus invoices without actual receipt of the goods covered under those invoices. In both the case the burden of proving that such shortage of finished goods or of cenvated inputs is due to bonafide reasons would shift to the assessee. In the present case, the shortage of CR Sheets and HR Sheets, which is to extent of 16.750 M.T. and 20.2 MT respectively is huge. Similarly, shortage in respect of the channels and CR Tub....