2004 (3) TMI 521 - AT - Central Excise

Summary

Issues: Stock discrepancies - Excess and shortages of CR GC Sheets, CR GP Sheets, CR GP Coils, and CR Coils.

In this case, during a stock taking, discrepancies were found where the appellants had an excess of 102.691 MT of CR GC Sheets, and shortages of 56.325 MT of CR GP Sheets, 50.686 MT of CR GP Coils, and 55.630 MT of CR Coils. The appellants failed to provide a satisfactory explanation for the shortages of CR Coils and had already paid duty on the said shortages. The appellants claimed that the excess CR GC Sheets were produced from the shortages of CR GP Sheets and CR GP Coils. However, the documents supporting this claim were not produced before the lower authorities and hence were not verified.

Regarding the shortage of CR Coils, the appellants could not satisfactorily explain it. The appellant's reliance on a Ministry's Circular allowing a 1% shortage for Iron and Steel products was deemed inapplicable to this case as it related to Integrated Iron and Steel Plants. Therefore, the duty demand for the shortages of CR Coils was upheld. However, for the shortages of CR GP Sheets and CR GP Coils and the excess of CR GC Sheets, since the documents supporting the appellants' claim were not verified by the lower authorities, the matter was remanded to the Original Authority for verification. The Original Authority was instructed to allow adjustment of shortages against excess if admissible and to reconsider the penalty imposed after verification, granting the appellants a reasonable opportunity of hearing before passing a fresh order.

In conclusion, the appeal was partly allowed by way of remand for further verification and adjustment of stock discrepancies, with specific instructions for the Original Authority to reconsider the penalties imposed.