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TMI Blog1998 (4) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... ehicles. In the course of such stocktaking either shortage or excess of the inputs as against the stock as entered in the records of the assessee may be found. Such information was called for by the Department, and the Department has demanded duty on the ground that inputs found short have not been used in the manufacture of finished products, by invoking the provision of Section 11A(1) and sub-rule (2) to Rule 57-I. He contends that the demand for duty is not sustainable for the following reasons. The shortage of the inputs is less than about 1% of the stock inputs that the applicant receives over a period of time. Applicant receives over 8000 inputs for the manufacture of motor vehicles and it is humanly not possible to keep an exact acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to Tariff Heading 87.08 may come down rate of duty. He cites example of springs etc classifiable at 20%. As far penalty, he contends that it has not been established that the applicant wilfully suppressed anything with any intent to evade duty. It was under the bona fide belief that the credit was not required to be reversed because these are only on accounting error. He contends that penalty is not leviable on the second applicant unless the provision of Rule 209A would apply. This rule would not apply, because there was no provision for confiscation of the goods in question, particularly since Rule 226 had not been invoked in the notice. 3. The Departmental Representative contends that the Department had made efforts to verify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been rightly imposed both on the first and second applicant , who was the authorised signatory responsible for maintaining Central Excise accounts. 4. We agree that it is not possible to keep a totally accurate record of the stock of a large number of inputs which are received, and that errors in accounting in such a situation might take place. The shortages are noticed to the extent of 1% of the total value and quantity of inputs received. At the same time, the fact that the inflow of input was so large and of such variety itself required the applicant to periodically conduct exercise in order to determine such shortages and to properly account for them. It is prima facie nor unreasonable to conclude that credit would have been taken on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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