2017 (8) TMI 1037 - AT - Central Excise

Denial of Cenvat credit - Shortage of weight - Held that - credit was denied on 0.35% shortage found in the weight as compared to the weight mentioned in the invoice. However, there is no dispute that number of blooms and the billets supplied by the supplier mentioned in the invoices have been fully received. There is no shortage in number of pieces. If this is so, then there is no actual shortage in the quantity of the goods covered by the invoices. The difference in weight is only the weight variation from the weight taken in one weighbridge and others - decided against the revenue.

Summary

Issues: Denial of Cenvat credit due to shortage in weight compared to invoice weight.

Analysis:
The case involved a dispute regarding the denial of Cenvat credit to the respondent due to a 0.35% shortage in weight compared to the weight mentioned in the invoices for inputs received. The adjudicating authority had confirmed the demand of Cenvat credit for the shortage. However, the Commissioner (Appeals) allowed the appeal, setting aside the Order-in-Original, leading to the Revenue's appeal before the Tribunal.

The Revenue contended that the shortage in weight of blooms and billets received by the respondent justified the denial of Cenvat credit attributed to the shortage. They relied on precedents to support their argument. On the other hand, the respondent argued that the meager shortage was solely due to weight variation, emphasizing that the actual number of blooms and billets mentioned in the invoices were fully received, and there was no shortage in quantity. They cited a relevant judgment by the Larger Bench of the Tribunal to support their stance.

Upon careful consideration of the submissions, the Tribunal noted that while there was a 0.35% shortage in weight compared to the invoice, the actual number of pieces mentioned in the invoices were fully received by the respondent. It was established that there was no shortage in the quantity of goods covered by the invoices. The difference in weight was attributed to weight variation and not a reduction in the actual quantity during transit. The Tribunal agreed with the Commissioner (Appeals) that the credit should be allowed since there was no discrepancy in the quantity received, despite the weight variation. Consequently, the Tribunal upheld the impugned order and dismissed the Revenue's appeal.

In conclusion, the Tribunal's decision favored the respondent, emphasizing that the shortage in weight did not translate to a shortage in the actual quantity of goods received, thereby entitling the respondent to avail the Cenvat credit despite the weight discrepancy.