TaxTMI 
TaxTMI 
2016 (3) TMI 993
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....eir own paid the following duty and informed the department about the same vide the letter attached with the appeal:- Date Amount 9th January 2000 Rs.21,315/- 12th June 2000 Rs.56,847/- 13th February 2001 Rs.49,765/- Total Rs.1,27,927/- The appellant has further alleged that as per the requirement of Income Tax Act, the appellant has been getting their accounts audited under the Income Tax Act, 1961 and the report is required to be submitted to the Income Tax Department under form 3CD. The annexure attached to the report in form 3CD for the financial year 1999-2000 and 2000-01 showed the following differences in stock of finished goods and raw material. Year ending March, 2000 Year ending March, 2001 Raw materials Base oil Additives Total Base oil Additives Total (i) Opening stock 1,289,610 97,965 13,87,575 5,314,142 305,732 5,619,514 (ii) Purchases during the year 17,069,732 1,691,353 18,761,085 8,344,561 1,363,708 9,708,269 (iii) Consumption during the year 13,033,145 1,485,628 14,518,772 11,764,522 1,452,554 13,217,076 ....
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....ellant to show cause for payment of Rs. 37,44,287/- on account of excise duty along with interest and penalty. The appellant replied to the show cause notice explaining the reasons for the shortage of raw material as well as finished goods in the factory and the depot. The Commissioner as adjudicating authority confirmed the demand of Rs. 37,44,287/- and imposed penalty of equal amount under Section 11AC of the Central Excise Act. Being aggrieved by the said order, the appellant has filed the present appeal. 3. The learned counsel for the appellant submitted that there are number of reasons for shortages of raw material in the base oil viz. variation in weigh bridge calibration, variation in temperature, minor defect in flow meter, variation in viscosity while dip reading and temperature at the time of measurement of stock. He further submitted that the Tribunal in the case of Bombay Dyeing and Manufacturing Co. Ltd. reported in 1999 (113) ELT 331 has held that when the minor variation in physical quantities received is less by 1 to 2% compared to the quantity shown in the supplier s challan, then the credit of duty should not be denied where the manufacturer has taken the credi....
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....served on 26.3.2004 which is after a period of one year from the relevant date. He also submitted that the alleged demand in this case is based on shortages of raw material and finished goods as shown in form 3CD i.e. report under the Income Tax Act whereas the fact of the matter is that the appellant has been verifying the stock of finished goods at the factory regularly and has been paying excise duty wherever there is shortage of finished goods. Further, the appellant on its own has debited the central excise duty of finished products found short and informed the department vide various letters dated 9.1.2000, 12.6.2000 and 13.2.2001 and the total amount debited is Rs. 1,27,927/-. He also submitted that there is no suppression of fact with intent to evade payment of duty on the part of the appellant and therefore extended period cannot be invoked and no penalty under Section 11AC can be imposed. 4. On the other hand, the learned AR reiterated the findings of the Commissioner. 5. I have heard the learned counsel for the parties and perused the records. 6. The matter in a narrow compass involves firstly, the demand of excise duty on account of reversal of credit on duty p....
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....the purpose of accountal in AR 3As and GP1s or GP2s or other clearance documents, quantity determined on the basis of difference of dip of the tank wagon/Tank lorry taken before and after filling should be taken as quantity cleared. The difference between the two quantities mentioned above should represent handling loss." The appellant relied upon the following case laws in support of their above argument:- CCE, Rajkot vs. Bombay Dyeing & Mfg. Co. Ltd. reported in 1998 (97) ELT 101, wherein in para 3 the Tribunal has held as under:- "3. The ratio of the decision of the (sic) relied? upon by the Tribunal decision Commissioner was that, when duty had been paid by the manufacturer of fibre on a particular quantity, but the quantity on receipt at the users factory was found to be less, apparently on account of loss and moisture during transit, credit would be available of the duty paid, and would not limited to the quantity actually received. The Tribunal emphasised such facts at the goods being on original packing, in support of its view that the loss was not due to any deliberate theft or pilferage, but due to evaporation of moisture. In the present case, for the diffe....
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....ted in 1998 (97) E.L.T. 101 (Tribunal). In the present case, the minor shortage of the inputs was due to dryage and due to handling is sufficient and logical reasons shown by the appellants. The duty has been taken does not exceed the duty paid on the invoices merely because after receipt it was found that certain small percentage of the inputs had been subjected to transit/handling losses, the credit of duty already paid by the recipient of the inputs cannot be denied." 6.2 Secondly, as far as the shortage of finished goods at the factory and depots is concerned, the appellant has debited the duty on its own and informed the department vide various letters dated 9.1.2000, 12.6.2000 and 13.2.2001. The goods sold from depot are excisable goods on which excise duty has already been paid and this fact has not been rebutted by the department either in the show cause notice or even in the order-in-original. Therefore, keeping in view the facts and circumstances and the evidence on record, I am of the considered opinion that the shortages found are very minor in nature, i.e. 0.6% which is well accepted in petroleum products as observed in the judgments cited above. I also find that in....