Scrap balance having in ER-1 so much as compared to Physical stock, Central Excise

[Pradip Sirsat]

Dear All,

the above subject mention we are having closing balance large quantity in your scrap commodity as compare to physical, and the balance we are carry forward in particular month.

i would like to share my view it is difference of Weighing balances form long time which is we not considering that's the reason differences so much,

so that requested to all, what should i do now? so that balance will tally with physical inventory of scrap.

kindly guide in this matter.

Thanks,

Pradip

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

The department will go by physical stock. If the physical stock is less than the book stock then department will allege that the differential stock had been cleared clandestinely without payment of duty. You have to prove that there is no clandestine removal of the excess stock. Whatever reasons are given by you, you have support the reasons with documentary evidence. Otherwise you have pay not only the duty and also to pay penalty equal to duty payable on excess stock.

[ashish chaudhary]

If difference can be reconciled based on Daily Stock Account maintained, suggested to adjust the same in the upcoming ER-1 under intimation to department.

[Pradip Sirsat]

Dear Sir,

thanks a lot sir,can you tell me how to adjust in upcoming ER-1,as we are maintaning RG-1 for scrap in excel sheet.

i ma waiting for your reply.

Regards,

Pradip

[Rajagopalan Ranganathan]

Sir,

First find out how the difference between the physical stock and R.G. 1 stock occurred. The write a detailed letter to the Range officer explaining the reason for the difference and intimate that you going to correct the difference from E.R.1 filed for the next month. I would like you to send me detailed reasons for the difference between physical and R.G. 1 stock. Then I can give a detailed reply to you.

[Pradip Sirsat]

Dear Sir,

Thanks a lot sir, i am really appreciated to you,i ma giving following reason it may accountable to mismatch stock for RG-1 and physical.

1 ) one is weighing balance difference,i.e. we are taking weigh on weighing machine that is capacity maximum 100 kg while arising scrap and at the time scrap clearance we used 'DHARAM KATA' that is the reason differences come out and since we started business we could not reconcile.

2) second is regarding some commodity we return back from scrap yard,like plastic pallet,been, etc

i ma very sure these are accountable for mismatch stock, now kindly request to you give proper reply so that matter will resolve.

Regards,

Pardip

[Rajagopalan Ranganathan]

Sir,

Please explain to the Department (Range officer) that the error is due weighing machine used by you and the correct weight of the scrap is as per 'DHARAM KATA'. Hence the difference. Regarding return back from scrap yard you explain the same to the Range officer. and intimate him that the correct stock of scrap will be reflected in the monthly return pertaining to October 2015.

[Mahir S]

Sir, a mistake is a mistake.

Best way out is to prepare an invoice for excess scrap and pay excise duty thereon on such excess scrap balance.

[YAGAY AND SUN]

Dear Pradip,

Using faulted weighing scale is an offence under Legal Metrology Act, 2009 read with Rules made there under. Notice can be issued to your directors in this regard and LM Department can impose hefty penalty Please get it calibrated from the Jurisdictional Legal Metrology Department.

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

[Pradip Sirsat]

Dear sir,

actually, we are not using faulted weighing machine just i was trying to say that is difference come out due different different weighing machine use.

our all machines calibrated time to time there is no issue.

Regards,

pradip