2013 (3) TMI 140

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..... . During the course of manufacturing of the said output, they required inputs, like, Imported Feed Stock, Carbon Black Stock, CBFS-HPL, LDO, Tar Oil and Coal Tar. The appellants are maintaining "Daily Records of Raw Materials" by adopting actual quantity of its stock consumed and closing balance of the stock in storage tanks and this has been arrived at from the flowmeter installed in their factory for receipt of such inputs. In pursuant to the Board's Circular, the appellants are also taking reading of monthly stock by the computerized method of measurement i.e. dip method. The dispute is that there is a difference in the stock as measured between the flowmeter and dip method. The appellants written off the shortages of inputs arrived at b .....

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..... inal product. Moreover, whatever the inputs have been received by them have been used in the manufacturing of their final product. There is no allegation against the appellants that they have diverted any inputs from their factory, which have not been utilized. He further submitted that whatever the inputs are found short, the same are a process loss. Therefore, the credit cannot be denied. To support his contention, he placed reliance in the cases of Hindustan Zinc Ltd. v. Commissioner of Central Excise, Jaipur reported in 2003 (162) E.L.T. 243 (Tri.-Del.), Indian Petrochemicals Corpn. Ltd. v. Commr. of Central Excise, Vadodara reported in 2005 (181) E.L.T. 99 (Tri.-Mumbai) & Commissioner of Central Excise & Customs, Daman v. Narendra Impe .....

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..... ly, when these inputs have been found short and the said shortage has not gone in the manufacturing of final product, therefore, the appellants are required to reverse the Cenvat credit on those shortages after adjusting the excess quantity during the course of stock taking by way of dip method. The case law relied upon by the ld. Advocate for the appellants are not similar to the facts of this case. In this case, the shortages were written off by the assessee in their books of account. In this case, the appellants themselves have admitted the shortages. Therefore, the case laws relied upon by the ld. Advocate are not relevant to the instant case. As held by the Hon'ble High Court of Bombay in the case of Greaves Cotton Ltd. (cited supra), .....

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