TaxTMI 
TaxTMI 
2014 (11) TMI 116
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....Excise Dept. and discharging appropriate duty liability. Team of officers of DGCEI, Ahmedabad visited the premises of the appellant and carried out search operation and certain documents were seized under panchnama. During the course of panchnama, the officer undertook, physical stock of various finished goods, inputs etc and officers found stock of finished good tallying and out of 42 inputs, case of 5 inputs, there was a shortage as compared with books of record. The details are as under : Sr. No Description of the goods Stock as per raw material stock register (MT) Stock found physically (MT) Shortage detected (MT) 1. Ferro Manganese (HC) 77.308 69.808 7.5 2. Silicon Manganese (MC) 27.616 22.916 ....
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.... any short. It is his submission that the consumption of 5 raw materials/inputs in question were to the tune of approximately 19 MT in the accounting year 2004-05 which would indicate that the appellant has been consuming raw material/inputs. It is his submission that the Adjudicating Authority has improperly perceived the shortages explained by the appellant which is 0.43% of the total consumption of the short found material. He would submit that the decision of the Tribunal in the case of BHEL vs CCE., Chennai' 2008.223.ELT.260 (Tri.Chennai) is directly on the point and submitted that if the inputs which found short are not removed clandestinely and the shortages are negligible compared to the total quantity of inputs, then demand cannot ....
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....icated in Paragraph 2 herein above) has been correctly explained and whether the appellant is required to reverse the Cenvat Credit availed on such short found raw materials. 8. At the outset, we would like to record that the appellants reply to the show cause notice specifically states that they are consuming about 42 raw materials for the manufacture of the finished goods and out of this physical stock of only 5 raw materials in question was not found tallying with the book of stock. It is also to be noted that they have been taking a constant stand before the Adjudicating Authority that the procurement and consumption of 5 raw materials in question vis-a-vis the shortage have been worked out to approximately 0.42% - 0.43%. This categ....
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....dustry wherein the appellant is engaged. Yet another point to be noted is that in the show cause notice there is no allegation of clandestine removal of raw materials found short nor there are any finding recorded by Adjudicating Authority on this point. We also find that our above view is fortified by the judgement of Hon'ble High Court of Punjab and Haryana in the case Maruti Udyog Ltd (Supra) as also decision of the co-ordinating Bench of the Tribunal in the case of BHEL (Supra). 9. Now we revert to the decisions cited by the DR and find that the decision of the Tribunal in the case of Max Worth Plywoods Pvt Ltd. shortage of finished goods and in the case of Azagappa Cements Pvt Ltd (Supra) High Court has recorded the shortage was abn....