TaxTMI 
TaxTMI 
2023 (11) TMI 1385
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....nd of duty was confirmed. 2. The facts of the case are that the appellant is engaged in the manufacturing of electric motor, fans and parts thereof. The appellant is having more than ten thousand items and follows a computerized system of accounting for movement of inputs as well as finished goods. The cost audit report of the Appellant for the years ending 2005 to 2009, inter alia contains the details of physical verification of raw materials, work-in-progress. it was found the said cost audit reports are in respect of examination of books of accounts of the appellant prescribed under clause (d) of section 209(1) of the Companies Act, 1956 (1 of 1956) and other relevant records by the Cost Accountants, appointed as auditor under section....
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.... 42.46 5,541 0.77 B. Jan'06 to Mar'07 Raw Material (6.35) 3.30 (3.05) WIP (53.52) 18.48 (35.04) Finished Goods - 5.57 5.57 Sub Total (B) (59.87) 27.35 (32.52) 14,673 (0.22) C. 2007-08 Raw Material (165.07) 128.45 (36.62) WIP (65.77) 82.16 16.39 Finished Goods - 7.66 7.66 Sub Total (C) (230.84) 218.27 (12.57) 11,864 (0.11) D. 2008-09 Raw Material (233.63) 225.98 (7.65) WIP (102.91) 66.77 (36.14) Sub Total (D) (336.54) 292.75 (43.79) 12,099 (0.36) F. Total (A to D) (640.46) 594.04 (46.42) 44,177 (0.11) G. Percenta....
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.....-Del.)], which has been affirmed by the Hon'ble Apex Court as reported in 2015 (319) ELT 549 (SC). He also relied on the decision of Tata Motors Ltd. v. Commissioner of Central Excise, Pune [2021-TIOL-753-CESTAT-MUM]. 6. He further submitted that mere shortage or excess of stock cannot invariably lead to the conclusion that there has been clandestine removal. He further submitted that show cause notice has been issued for the period April 2005 to March 2009 on 04.10.2010 by invoking extended period of limitation, therefore, the same is not sustainable. 7. On the other hand the Ld.AR for the department submitted that it is a fact on record that the appellants are having more than ten thousand items and some items are found short, ther....
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....n such a situation it is but natural that minor variation (0.5% and below) do occur during reconciliation. The explanations provided by the assessee during the original proceedings have been accepted by the lower authority and he allowed the possibility of shortages and excesses in respect of various individual category of raw materials and finished goods. However, he confirmed the reversal of credit in respect of raw material found short after netting of excess with shortage among various varieties. Same method has been adopted for finished goods also. We find that the shortages and excesses found during physical stock verification which remained unreconciled are within the tolerance limit keeping in view the thousands of types of raw mate....
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....one by the officers before the Commissioner allowed such adjustment. We find that the physical inventory was in fact done by the assessee and the Revenue came into the picture much later. In any case, the nature and possibility of accounting error not being denied the adjustment as ordered by the Commissioner on the clear reasoning cannot be faulted. We find that remand of the case on this ground will not serve any purpose. In any case the assessee's appeal having been allowed we find no further reason for remand." 10. By following the said order, we allow adjustment of shortages and excesses of the goods as per the chart before us. As the difference is very negligible, this can be ignored. We agree with the contention of the Appellant t....