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TMI Blog2014 (2) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... y indicates the quantity of raw material consumed during the year. Thus, this document is of no use in ascertaining the receipt of raw materials, during 1995-96. As per the daily stock statement register, the quantity of receipt of raw materials during the year 1995-96 is found to be 78,408 MTs. Further, from the statement of Shri Pattanshetti, Assistant Manager (Stores) of the appellant firm, it is evident that the receipt of goods were entered as soon as they were received and the consumption of the goods were also recorded on a daily basis. If the appellant had followed this procedure as admitted by them, there is no reason to disbelieve the figures reflected in the daily stock statement maintained by the appellant. Therefore, we hold that for excise purposes reliance placed by the adjudicating authority on the figures reflected in the daily stock statement register cannot be faulted at all. - On the basis of these evidences available, we have no hesitation to conclude that the quantity of raw material received by the appellant during 1995-96 was only 78,408 MTs. and therefore, the appellant could have taken credit only on this quantity. Accordingly, we hold that the adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the daily stock statement maintained by the appellant, which indicates the opening balance, receipt, consumption and closing balance of the raw materials, the receipts were shown to be 78,408 MT. Therefore, notice was issued to the appellant alleging that they have availed excess credit on a quantity of 14,019 MTs (92,427 MTs - 78408 MTs) without actual receipt of the materials and therefore, no credit could be taken on the said quantity amounting to ₹ 1,43,84,828/-. As regards the demand of ₹ 3.00 lakhs, this demand pertains to the quantity of raw materials short received by the appellant being the difference between the quantities indicated in the duty paying documents and the weighment of the inputs received at the weigh bridge of the appellants. In respect of this quantity, the appellant had raised debit notes on the supplier/transporter towards non-receipt of the goods and had recovered the amount. Therefore, the adjudicating authority concluded that in the absence of actual receipt of the goods, no credit could be taken and accordingly confirmed a duty demand of ₹ 3.00 lakhs. As regards the third demand of ₹ 6,41,516/-, the appellant had supplied raw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the credit has been taken based on duty paying documents and therefore, this credit cannot be denied even though there might be a marginal variation in the quantity indicated in the duty paying documents and the actual receipts. Since the difference is only marginal, availment of duty credit is permissible in law. As regards the demand of ₹ 6,41,516/- is concerned, it is the appellant s contention that the scrap was generated at the job-worker s site and it was the job-worker who manufactured the goods. Therefore, the demands were required to be made on the job-worker and not on the appellant, who was only a supplier of raw materials. Reliance is placed on the decision of the Hon ble Bombay High Court in the case of CCE v. Rocket Engineering Corporation Ltd. - 2008 (223) E.L.T. 347 (Bom.) in this regard. As regards the demand of ₹ 22,17,400/- on DSRM Rolls machined and manufactured by the appellant and sold to ISSAL in September 1996, the learned Counsel submits that the appellant never removed these goods from their factory but captively used the same in the manufacture of various final products within their factory. Since the DSRM Rolls are capital goods as define ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter. Therefore, the adjudicating authority is right in denying Cenvat credit on 14019 MTs which is in excess of the figures reflected in the daily stock register. Accordingly, he submits that the demand of ₹ 1,43,84,829/- by denying the credit on excess material is clearly sustainable in law. 5.1 As regards the demand of ₹ 3.00 lakhs, he submits that the appellant has taken a very strange stand; while on the one hand, they admit shortage in receipt of inputs and have raised debit notes on the supplier/transporter for non-receipt, on the other, they claim that they are entitled to Cenvat credit on the material not received. The action of the appellant in raising debit notes on the supplier/transporter clearly evidences the fact that the appellant did not receive the material. Therefore, the demand of ₹ 3.00 lakhs being Cenvat Credit on material not received is sustainable in law. 5.2 As regards the denial of Cenvat credit of ₹ 6,41,516/- is concerned, the goods have been removed under Rule 57F(4) to the job workers. Rule 57F(5)(i) mandates that the waste, if any, arising during the course of any operation mentioned in sub-rule (4) shall be returned to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... document prescribed (during the relevant period) as regards receipt of raw material is the Form-IV register which should indicate the opening balance, the quantity received, the quantity issued for consumption and the closing balance of the raw materials and the said register is required to be maintained on a daily basis. The daily stock statement maintained by the appellant corresponds to the requirement of Form IV register. Thus, this is the statutory register on the basis of which the raw materials received, consumed and closing stock are ascertained for Central Excise purposes. In the present case, as per the daily stock statement register, the quantity of receipt of raw materials during the year 1995-96 is found to be 78,408 MTs. Further, from the statement of Shri Pattanshetti, Assistant Manager (Stores) of the appellant firm, it is evident that the receipt of goods were entered as soon as they were received and the consumption of the goods were also recorded on a daily basis. If the appellant had followed this procedure as admitted by them, there is no reason to disbelieve the figures reflected in the daily stock statement maintained by the appellant. Therefore, we hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings would not sustain. 6.3 Coming to the next demand of ₹ 3.00 lakhs, appellant has not disputed the fact that they did not receive the material and therefore, they raised debit notes on the supplier/transporter towards non-receipt of the goods and recovered the charges for the value of the materials not received. It is clear from this factual position, as admitted, the appellant wants to avail credit in respect of material not received. This contention of the appellant cannot be accepted at all. The Cenvat Scheme envisages receipt of duty paid inputs and its utilization in the manufacture of dutiable final products. Therefore, we dismiss this contention and uphold the confirmation of duty demand to the extent of ₹ 3.00 lakhs being the credit taken on raw materials not received. 6.4 Coming to the demand of ₹ 6,41,516/- the appellant cleared the goods under Rule 57F(4). Under Rule 57F(5) the appellant was required to bring back the waste generated at the job-worker's factory premises and the only situation where the appellant was exempted from bringing back the waste generated was when the waste was cleared on payment of duty at the job-worker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods are removed as such or removed after use or removed as waste and scrap under the provisions of Rule 57S(2) of the Central Excise Rules, as it stood at the relevant time. In these circumstances, reversal of credit taken on the capital goods captively used in the manufacture of final products is not warranted. Therefore, the demand of ₹ 13,05,482/- on this ground is not sustainable in law. 6.6 In view of the above analysis, we uphold the demand of ₹ 1,43,84,829/- being the ineligible Cenvat credit availed by the appellant on raw materials not received, ₹ 3.00 lakhs being the demand towards inputs short received in the factory and ₹ 6,41,516/- being the Cenvat credit on inputs supplied to the job-workers and not bringing back the waste which had arisen at the job workers end. However, we set aside the demands for ₹ 22,17,400/- and ₹ 13,05,482/- being the duty on DSRM Rolls captively consumed by the appellant. 6.7 As regards the penalties imposed of ₹ 48.00 lakhs towards wrong availment of Cenvat credit on ₹ 1,43,84,829/- and ₹ 3.00 lakhs on the availment of credit on shortage of inputs and another ₹ 3.00 lakhs being ..... 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