TaxTMI 
TaxTMI 
2019 (8) TMI 671
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....rmed a duty demand of Rs. 1,61,10,218/- against the appellant under Rule 223A of the erstwhile Central Excise Rules, 1944 (hereinafter referred to as the "said Rules"). The Commissioner has also imposed a penalty of Rs. 2000/- upon the appellant under Rule 223A of the said Rules. 3. The facts in brief of the instant case are as under:- (a) The appellant is an integrated steel plant situated at Durgapur, West Bengal, manufacturing iron and steel products which are classified under various sub-headings of Chapters 72 and 73 of the First Schedule to the Central Excise Tariff Act, 1985. (b) Show cause notices dated January 30, 1991 and March 31, 1992 were issued by the Superintendent of Central Excise, DSP Range-I proposing demands of duty as per Rule 223A of the said Rules on shortage found as contained in the Annual Shortage and Surplus Report, arrived on stock verification carried out by the appellant's cost Accounts Section during the material periods, which were duly intimated to the jurisdictional Central Excise authority by the appellant. (c) The said show cause notice resulted in the impugned order passed by the Commissioner of Central Excise, Bolp....
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....79-CX-C dated October 26, 1979, except in one case where there is a marginal excess of point 0.25% and findings to the contrary of the Commissioner in the impugned order is erroneous. In support of this contention the appellant has relied upon reconciliation charts prepared as per the Annual Stock Taking reports for the years 1988-89, 1989-90 and 1990-91, the periods involved. It was also contended that in case of pig iron for the year 1988-89 the shortage found was 2.25% as against the allowed limit of condonation of 2%, a negligible fractional excess shortage and moreover, from the impugned order itself it would be seen that the demand for alleged shortage of 2982 MT of pig iron for the period 1988-89 had already been raised in a different proceedings. Therefore, no demand of alleged shortage in respect of pig iron for the year 1988-89 can arise or survive in the instant proceeding. Further, consequent to the directions of the Hon'ble High Court, he has submitted reconciliation statements, separately for the financial year 1988-1989, 1989-1990-1991 to gether with the stock taking reports for the said period. On the basis of which, he demonstrated the stock shortage within the per....
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....is, but, however, the clearances were effected upon actual weighment basis. In such cases there is bound to be difference in weighments. A case of shortage or excess of stock and/or clandestine removal thereof without payment of duty is not established in such a situation. 7.3 An identical issue arose in the case of the appellant's own unit at Bhadravathi, Mysore, decided by the coordinate Bench of the Tribunal at Bangalore, being Appeal No. E/55/2003 (Steel Authority of India Limited Vs. CCE,) on October 04, 2005. The similarity of the facts between the instant case and the said case decided by the Bangalore Bench of the Tribunal is evident from the following:- Sl. No. Instant Appeal Bangalore Bench Order 1. Demand has been issued under Rule 223A of CER'44 Demand has been issued under Rule 223A of CER'44 2. There is no allegation of clandestine removal of goods. There is no allegation that the appellant had removed goods in clandestine manner. 3. Stock taking was done by the appellant themselves, without any association of departmental officers. Therefore, stock taking cannot be said to have been conducted in terms of Rule 223A. Stock taking ....
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.... would apply in making demands of duty on balance found during stock taking. The appellants based many reasons for discrepancies between the RG-1 and physical stock. For example, the RG-1 is only based on estimated production and not based on actual weighment Physical stock is also based on estimation of weight on the basis of volumetric estimate and conversion of theoretic weight based on sectional weight. A comparison between two estimation is inherently inaccurate Lesses like cutting, grinding and milling, scale loss after heat treatment and straightening, reprocessing after Inspection at various stage of manufacture are not recorded in RG-1. Rejections are not recorded while accounting for quantity produced or issued in the terms of sections and ingots. Shortage is inflated due to errors in taking crening balance as on 1.4.1998 and physical stock on 31.3.2001. Considering the practical difficulties, in estimating the actual stock and in view of the submissions made by the appellants we find that the demand of duty made by adjudicating authority cannot be sustained. Therefore, we allow the appeals with consequent relief." 7.5 In the case of Rourkela Steel Plant (SAIL) Vs. Com....