TaxTMI 
TaxTMI 
2024 (6) TMI 181
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....18,64,708/- under the head "Losses on Scrapped packing Material (iii) an amount of Rs. 18,106/- under the head "Losses on Scrapped SFG Manufacture (iv) an amount of Rs. 1,48,878/- under the head "inventory Variance Loss-Raw Material (v) an amount of Rs. 80,20,305/- under the head "Inventory Variance Loss - Raw Material and (vi) an amount of Rs. 39,694/- under the head "Inventory Variance Loss - Packing Material Jammu. From the description of Ledger, it appeared that the said amounts pertains to raw material/packing material which had been scrapped/lost i.e. which has not been used in or in relation to manufacture of finished goods. Hence, the appellant appeared not entitled to Cenvat Credit on such scrapped/raw material which has not been used in the manufacturing process. On these allegations, a show cause notice was issued on the basis of this audit and after following due process the adjudicating authority confirmed the demand. Aggrieved by the order of the adjudicating order, appellant filed appeal before the Commissioner who confirmed the demand of Rs. 10, 79,329/- along with interest and imposed equal penalty under Section 11AC of the Central Excise Act. Hence, the present ap....
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....020 which is beyond limitation as prescribed under law. 8. On the other hand, Ld. AR reiterated the findings of the impugned order. 9. After considering the submissions of both the parties and perusal of the material on record, I find that the entire case was built on the basis of entry in the ledger and there was no inquiry/investigation into the matter; no statement was recorded. The appellant has maintained proper records which is verified by the drug authorities from time to time and moreover, Chartered account certificate has also been placed on record which clearly certified that there is no write off input and moreover, the variance is only 0.28% which is normally accepted in the industry. Further, I find that the issue is squarely covered by the decision relied upon by the appellant cited (Supra). In this regard, I may refer to the decision of the Tata Motors Ltd. Vs. Commissioner of Central Excise, Pune-I reported in 2021 (11) 830 CESTAT MUMBAI; wherein the Division Bench of the Tribunal has considered various decisions on this issue and has observed as under: "6. We find that in the facts and circumstances of the present case the shortages and excesses if any found ar....
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....r factory and upon receipt they were properly accounted for. Learned counsel denied the allegation that the inputs were not used in or in relation to the manufacture of final products. He further submits that the extended period is not invokable in the facts of the present case and Rule 3(5B) ibid has no application in the present case. Nor Rule 11 is applicable as the said rule will come into play only when the Cenvat Credit has been taken or utilised wrongly whereas in the present matter the Cenvat credit was rightly taken on eligible inputs upon their receipt. Learned Authorised Representative on the other hand reiterated the findings recorded in the impugned order and prayed for dismissal of Appeal. According to learned Authorised Representative the appellants are liable to pay an amount equivalent to Cenvat Credit taken on inputs allegedly written off in terms of Rule 3(5B) Ibid alongwith interest and penalty, as it categorically states that an amount equivalent to the Cenvat credit taken on input written off is payable by the assessee. He denied the contention of learned counsel that those parts which were not available during physical stock verification at its specified stor....
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....idered view rule 3(5B) Ibid cannot be applied on the facts of this case as the entire case of the department is that the goods are not available in the factor whereas for the application of the said rule the goods have to be available in the factory and only a book entry is to be made to write off the value of the said goods. We are also not oblivious of the fact that on a similar set of facts in appellants own case this Tribunal in the matter of M/s. Tata Motors Ltd. Vs. CCE, Pune- 1; reported in 2016-TIOL-1027- CESTAT-MUM while relying upon the law laid down by the Hon'ble Supreme Court in the matter of Maruti Suzuki India Ltd.; 2015(319) ELT 549 (SC) decided the issue in favour of the Appellants. Similarly in another matter of Appellants i.e. Appeal No. E/172/2009 in the matter of M/s. Tata Motors Ltd. Vs. CCE&ST, Jamshedpur, a coordinate Bench of the Tribunal vide Order dated 11.1.2019 decided the issue in favour of the appellants therein and held that the demand is not sustainable and there is no evidence on record that the inputs on which the Credit was taken, were not received in the factory or removed as such from the factory. 6. While following the decisions as cited....
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....accordingly allowed. Following the ratio of the aforesaid judgments of this Tribunal which is based on the Hon'ble Supreme Court's judgment in case of Maruti Suzuki India Ltd. (supra), I am of the view that Cenvat credit cannot be disallowed in the facts and circumstances of the present case. The impugned order is set aside, appeal is allowed. (iii) Tata Motors Ltd. Vs. Commissioner of Central Excise - 2017- TIOL-1027-CESTAT-MUM 4. I have gone through rival submissions. I find that the Order-in-Original clearly records that the appellants have elaborate method of accounting. There is no allegation of any mischief in the shape of clandestine clearance of receipt of raw materials. The Tribunal in case of Maruti Udyog has observed as follows : "7. The appellants have a huge and complex accounting problem. It is beyond manual tally. The appellants have put in place sophisticated computer based accounting systems to ensure accuracy and efficiency. The evidence on record does not indicate any diversion of inputs in contravention of rules relating to utilisation of inputs. The demand is merely based on the shortages detected during physical tallying, that too without takin....
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....ming the Modvat credit on the basis of figures disclosed by then in respect of the inputs which were used while manufacturing the motor vehicles. A finding of fact is recorded that there was no clandestine of removal of any inputs. It is therefore, not a case for any interference." 4.1 I find that the case of the appellant is squarely covered by the decision of the Hon'ble Supreme Court in case of Maruti Udyog (supra). The only difference is that in case of Maruti Suzuki, value of excess found was greater than the value of shortages, whereas in the instant case the value of shortages is higher than the value of excess. In so far as the value of shortages ranging from 0.01% to 0.21% whereas the excess ranging from 0.01% to 0.08% of the total procurement of parts. I find that the Tribunal in its decision in case of Maruti Udyog Ltd. (supra) has not relied on quantum of shortages are excess, but has relied solely on minuscule percentage of shortages found. The Hon'ble Supreme Court also has relied on the percentage of shortages found. However, as an additional argument, the Hon'ble Supreme Court has observed that the fact that shortages of input was less than the excess ....