9911796707
TMI Blog2009 (3) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,88,869/- alongwith interest against the Appellant under Rule 57I(1)(ii)/57AH of Central Excise Rules, 1944 read with Section 11A and 11AB of Central Excise Act, 1944/Rule 57I(5) of Central Excise Rules, 1944 and imposing penalty of equal amount on the Appellant under Section 11AC of Central Excise Act, 1944/Rule 57I(4) of Central Excise Rules, 1944. The Appellants are engaged in the manufacture of Aluminium and products thereof. For manufacture of Aluminium and its products, a number of duty paid inputs are procured by the Appellant on which Cenvat credit is taken. The dispute in this case is about C.P. Coke, Hard Pitch, Silicon Metal, Furnace oil and Light Diesel Oil received during the period from April' 96 to March' 2000. These inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords of the Appellant wherein certain quantities of inputs have been shown as short received; that the Appellants have clarified to the Department that the difference in weighment at the Appellant's premises has occurred because of difference in the two weighing scales namely, weighing scales of the supplier and weighing scales used at the Appellant's premises, that commercially, the differences which have been indicated are well within the acceptable norms and therefore, the same cannot be attributed as shortages; that in regard to the inputs in liquid form, the difference has occurred because of the method adopted for measurement, namely, dip reading and besides this, density of the material in the oil tank also affects the reading; that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the other at the consumer's place. Another judgment cited was the Tribunal's judgment in the case of P.K.P.N. Spinning Mills v. CCE reported in 1997 (89) E.L.T. 588 wherein the Tribunal held that even though the quantity of goods which was received by the assessee was a little less than the quantity on which duty was paid, the same is not on account of any deliberate act or omission on the part of the manufacturer or recipients and in such a situation, the Cenvat credit cannot be denied. In view of the above, it was pleaded that the impugned order is not correct. 2.2 Shri Virender Chaudhary, ld. JCDR reiterating the Commissioner's (Appeals) findings in the impugned order emphasized that the Modvat credit is available to a manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the Appellant, can be due to difference in the weighing scales used by the supplier and the Appellant and in case of liquidate inputs due to differences in dip reading. We are unable to appreciate that reasonable transit loss or such small difference in quantity due to difference in weighing scale or difference in dip reading can result in denial of the Modvat credit to the Appellant. More so, when the show cause notice does not bring any allegation about the Appellants, having illucitly diverted the inputs in respect of which Cenvat credit had been taken. We also find that Hon'ble Rajasthan High Court in the case of UOI v. Bhilwara Spinning Ltd. (supra) has held that when there was no diversion of goods covered under the invoices an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplier's invoice in spite of having received a little lesser quantity than the actual quantity shown in the supplier's invoice is permissible and reversal Cenvat credit on the amount of short receipt of inputs is not required. Thus, from a series of judgments on the issue involved in these cases, it is clear that the settled legal position is that Cenvat credit to the extent of full amount of duty shown in the supplier's invoice is permissible, even if the quantity actually received is somewhat short provided the shortage is meagre, attributable to difference in weighing scales and/or transit loss due to evaporation in case of liquids, and there is no evidence of deliberate illicit diversion. In this case, the shortage of 0.08% to 0.38% ..... X X X X Extracts X X X X X X X X Extracts X X X X
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