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TMI Blog2007 (5) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... inium in all forms lying in the plant premises including adjoining areas like scrap yard, pig yard, ingot yard, recycling plant etc. Certain discrepancies were found in the physical stock and the stock entered in the RG-1 register and accordingly duties were demanded from them in respect of the excess stock so found. Majority of the demands were dropped by the Commissioner and the present appeal is in respect of 163.494 MT of the goods found in bonded store room during the in-house inventories taken by the unit which were in excess of the recorded balance. A duty amounting to Rs. 19,91,222/- has been confirmed in respect of this excess found in their premises. Further a quantity of 352.965 MT of unaccounted scrap valued at Rs. 1,76,38,250/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material should be available but during physical inventory it was not traced, it is identified as material not found. The demand confirmed by the Commissioner is with reference to the extra material found in the warehouse i.e. in excess of the material as per the records of warehouse, lying in the factory. It was submitted that the question of demanding duty on the material found inside the factory at the relevant inventory cannot be made the basis to demand duty. The demand can arise if and only if there is evidence to show that any such material was removed without payment of duty. In the absence of any such allegation and in any case no evidence gathered during the extensive investigation, the demand is liable to be set aside. At th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is send for conversion into ingots or in case where the scrap is used captively, the same is ac counted for at the time it is issued for captive consumption. This practice was brought to the notice of the department vide their letter dated 2nd October 1991 but on the insistence of the department they started maintaining scrap account on estimated basis in the ratio of 30% of the finished product and intimated the department vide their letter dated 8th October 1996. This practice is still continuing. It was submitted that though the Commissioner notes that the scrap recorded is on estimated basis only and the reason for excess found was also mentioned on account of the fact that certain finished products which were subsequently found defect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resulted in excess supply of material. It was submitted that Commissioner in his order has clearly held that there was no intention to evade duty as the goods were cleared to their own unit who in any case were entitled to take Modvat credit of the excess quantity cleared and the difference was on account of the spool weight. In such a situation the extended period should not have been invoked but they are not contesting the duty looking into the smallness of the amount and are contesting penalty imposed on the company and its officer. 5. As regards penalty imposed on the company and its officer, it was submitted that nowhere it has been established that non-accountal was with intention to evade duty and demands relating to shortages h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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