TaxTMI 
TaxTMI 
2015 (10) TMI 1555
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.... is manufacturer of Bali Bearings and Axle Boxes liable to Central Excise duty. They are availing credit of inputs and capital goods. They manufactured wide varieties of Ball Bearings and claimed to deal with 1,40,000 different types of raw materials, work-in-progress goods, finished goods, stores and supplies taken together. They have conducted audit of their inventory of all items namely inputs in stock, goods-in-process, and finished stock. During the course of such verification they found certain shortages and certain excesses in respect of various inputs as well as finished goods. Based on the report of the assessee's auditors the Revenue conducted certain inquiries and proceeded against them to demand reversal of credit on inputs ....
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....P system. The assessee elaborately discussed in their appeal with illustration about the possibility of shortages or excesses arising in the situation where large numbers of variants are dealt by during the manufacturing process. They have also elaborated that various reasons which could result in the variation in accounted stock and physical stock. Finally, they reiterated that the percentage of net shortage/excess of the goods, in question, during the impugned periods is below 0.5%. Further on value of clearance of more than Rs. 1,112 crores the finished goods found in excess is to the value of Rs. 14.64 lakhs with a duty liability of Rs. 2.39 lakhs. Such value of excess goods works out to 0.012%. This they have emphasized to show that th....
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....ounted. He emphasized that considering the volume of operation and lack of any material on record to show any unaccounted clearance vis-a-vis the shortages and excesses found in stock taking there is no case for any demand against them. On the other side, learned AR reiterated the contention that the shortages and excesses found during physical stock taking are to be duly subjected to the provisions of Central Excise law and consequently the assessee is liable for reversal of credit arisen out of such non-availability of physical stock and duty on excess final product. 5. The admitted facts of the case are that the assessee is having computerized accounting which manages end to end operations i.e. from the set of procurement of raw materia....
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....I reported in 2004 (173) E.L.T. 382 (Tri. - Del.) and in Widia India Ltd. vs. CCE, Bangalore reported in 2007 (207) E.L.T. 562 (Tri. -Bang.) later affirmed by the Hon'ble High Court of Karnataka -2010 (255) E.L.T. 36 (Kar.)- Another important point to be noted here is that while the whole discrepancy in physical stock has come to light only as per the stock taking conducted by the assessee, there is no allegation or evidence to the effect that the shortages/excesses are not attributable to accounting errors or complexities but are due to unaccounted clearances finished goods and consumption of raw material. In the absence of any such corroboration the assessee's plea on the non-sustainability of order reversing credit or demanding d....