2017 (3) TMI 1600 - AT - Central Excise

CENVAT credit - Penalty - shortage of 337.035 MT of non-alloy steel billets - Held that - the reasons for shortage has been explained but no verification was conducted. In that circumstances, the investigation was conducted by the Revenue is deficient and incomplete - the charge of shortage of inputs is stands disproved - neither Cenvat credit can be denied to the respondents nor penalty can be imposed - decided against Revenue.

Summary

Issues:
Appeal against dropping the charge of shortage of goods.

Analysis:
The case involved an appeal by the Revenue against an order where the Commissioner (A) had dropped the charge of shortage of goods. The facts of the case revealed that a stock verification at the factory premises of the respondent showed a shortage of non-alloy steel billets. The respondent explained that due to non-availability of transportation and labor, they could not lift the entire stock from the railway yard, leading to the shortage. The Revenue issued a show cause notice denying Cenvat credit and imposed a penalty for not following procedures. The adjudicating authority dropped the charge but imposed a penalty, which was later set aside by the Commissioner (A). The Revenue appealed this decision.

During the hearing, the Appellate Tribunal noted that the reasons for the shortage had been explained by the respondent during the investigation, but no verification was conducted by the Revenue. The Tribunal held that the investigation was deficient and incomplete, leading to the disproval of the charge of shortage of inputs. Consequently, the Tribunal concluded that Cenvat credit cannot be denied to the respondent, and no penalty can be imposed.

In the final decision, the Tribunal found no infirmity in the impugned order and upheld it, dismissing the appeal filed by the Revenue. The judgment was pronounced in the open court, bringing the case to a close.