TaxTMI 
TaxTMI 
2015 (11) TMI 608
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.... engaged in the manufacture of Alloy Steel viz. Ingots, other Bars & Rods of silicon Magnese Steel and bars and rods of high speed steel falling under Chapter 72 of Central Excise Tariff Act 1985. On 19/4/2000, the officers of Preventive Branch, Central Excise, Nagpur visited the factory premises of the appellant and conducted physical stock verification. In scrutiny of statutory records, it revealed that in the finished product except slag stock of all other products viz. M.S. Non Alloys steel Ingots, Other alloy steel ingots, Ferrous waste and scrap etc. was found "Nil". The officers conducted checks of raw material in the presence of two independent panchas and Shri. Prafulla Vaidya, Managing Director of M/s. Shripra Alloys Ltd. One Pa....
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....s that at the time of visit of the Central Excise officers in the presence of independent panchas and also in the presence of Managing Director of the company stock verification was done and there was shortage of inputs was found. Department has confirmed the demand not only on the basis of panchanama but there was further chemical test got conducted from chemical examiner therefore department carried out the process of physical stock verification, chemical test thereafter came to the conclusion that there was shortage of inputs and confirmed demand. It is his submission that once the shortage was found it has been accepted by Managing Director of the company and at the time of stock verification the position of shortage cannot be altered b....
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....s and all such stocks used to be re-melted in the next heat. The Ld. Commissioner(Appeals) after appreciating the entire evidence on record and explanation put forth by the appellant disagree with the conclusion of Chemical examiner in the chemical analysis report by relying upon the standard literature on sponge iron which recognizes that sponge iron is susceptible to oxidation on being expose to moisture. The appellant further submits that difference in stock if any is mainly for the reason that entries of consumption is made on theoretical basis by making the backward calculation from weight of finished goods therefore in this method there is always differences in the physical stock and the booked stock. The respondent time and again giv....
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....of iron contains. Though on the spot, at the time of verification of the stock by the officers, Managing director of the appellant company has accepted the shortage but he also stated that he will give his explanation later. Subsequent to visit the officers appellant has given proper explanation for the shortage such as quantification of demand was not correct for the reason that demand was calculated at the current rate whereas actual credit should have been worked out ;the stock was lying for the last two years therefore it has exposure to the nature absolutely undergone some changes. Chemical examiner report in the one hand it says iron contains 62.8 % but in other hand it says material does not have characteristics of sponge iron. The d....