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TMI Blog2012 (12) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... on order for the sake of convenience. 2. The appellant raised the following grounds for all Assessment years 2001-02 to 2006-07 in these appeals: 1. The Learned CIT(A) erred in not appreciating the fact that to justify a claim, the assessee is duty bound to produce all necessary evidence to the satisfaction of the Assessing Officer, which in this case the assessee failed to do so. 2. The Learned CIT(A) erred in not appreciating the fact that the quantitative details as were required in support of its claim of burning loss were not maintained by the assessee. 3. The Learned CIT(A) erred in not appreciating the fact that the Assessing Officer while rejecting the assessee s claim of burning loss had in fact dwelt upon comparable cases and brought out a well reasoned order. 4. The Learned CIT(A) erred in not appreciating the fact that the non-rejection of the assessee s claim in the original return u/s.143(1) would not tantamount to acceptance per-se of the assessee s claim and that such claim should always stand the test of scrutiny in the regular assessment. 5. The Learned CIT(A) erred in not appreciating the fact that instead of maintaining quantitative details as are re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring concerns of Agrawal Group. The Assessing Officer also noticed that at times the burning loss was claimed as low as 3.04% to 3.06% in the case of assessee itself for subsequent assessment years. Therefore, the assessee was confronted on this issue and assessee vide letter dated 18.10.2007 submitted to the Assessing Officer as under for A.Y. 2001-02: First of all we would like to explain the fact that there is no parameter by which the burning loss can be measured with 100% accuracy. The burning loss is a weight loss of input during the process of manufacturing for various reasons such as quality of raw material used, size and condition of raw materials, dust, rust, ashes percentage, condition of furnace and quality of raw material used etc. The degree of burning loss differs from lot to lot considering quality and presence of above other elements in each lot. By using ingots the burning loss may range from 3% to 5% for the reason that ingots itself is finished goods. In case of use of MS scrap as raw material, the burning loss range from 10% to 15%. Considering the above explanation, it will not be justified to restrict the disallowance of burning loss to 3% only. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs the factory premises and the finished goods that leave the factory premises. As a measure of systemic checks and balances, the excise records make it obligatory on the part of the assessee to maintain quantitative details regarding the raw material issued for manufacturing operations and the details regarding the finished goods manufactured on the daily basis. In blatant violation of these prescribed norms, the assessee has been uniformly debiting the estimated figures of quantitative details in these registers. A cursory glance at the registers seized during the course of search action reveal that exactly same figures have been mentioned for days and months together. For example, the quantitative input into the furnace has been mentioned at 12000 kgs. Whereas the losses have been continuously written as 600 kgs. It is humanely impossible to say that these figures are factually correct. They very clearly show that assessee has been arbitrarily entering these figures in the registers. In absence of any realistic data being recorded in the prescribed registers, I have no option but to go for the minimum figure reported by the assessee in the same concern but in subsequent assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the process of manufacturing for various reasons such as quality of raw material used, size and condition of raw material, dust, rust, ashes percentage, condition of furnace. The burning loss also depends on the size of finished goods produced. It is more if finished goods is lesser in diameter/thickness. The percentage of burning loss differs from lot to lot. In the above period, assessee had purchased m.s.scrap plate from: rejected ship called ship plate as it is more deteriorated, m.s.bar cutting, m.s. re-roll scrap, m.s round cutting, scrap material, m.s. flat cutting, m.s. sariya and squares, tor steel scrap and m.s. heavy scrap. The detail purchases of the above material for the assessment year 2000-01 to 2005-06 has been attached and it has been prepared from the purchase bills and purchase accounts of the raw material. (Annexure 1). In our written submission of appeal, we have stated the different percentage of burning loss as follows: A. I f raw material used is ingot, then the burning loss is in the range of 3% to 5%. B. I f raw material used is M.S.Ship Breaking Plate, then the burning loss is in the range of 8% to 10%. C. I f raw material used is M.S.Old C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee s claim and as such claim should always stand the test of scrutiny in the regular assessment. The CIT(A) also erred in not appreciating the fact that instead of maintaining quantitative details as are required under Central Excise Rules and on basis of which burning loss claim should have been made, the assessee chose to claim loss on the basis of some arbitrary figures. The Ld. Departmental Representative contended that the order of the CIT(A) be set aside and that of the Assessing Officer be restored in all these years. 9. On the other hand, the Ld. Authorised Representative of the assessee relied on the contentions made before the lower authorities and supported the order of the CIT(A). 10. After going through all the above submissions and material on record, we find that the contention of the assessee has been that the burning loss claimed was actual and the same should be accepted. On the other hand, the Assessing Officer restricted the burning loss @ 6%. The Assessing Officer rejected the assessee s arguments on the grounds that the assessee did not maintain the proper records and quantitative details regarding production of steel. It was also stated by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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