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TMI Blog2007 (8) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise for checking of the stock of the finished goods and inputs. It was noticed that there was shortages of 33 MT of finished goods and there was excess of inputs and also it was noticed that the appellants had availed inadmissible Cenvat credit on the LDO and capital goods like overhead wire and Nas Beams. On the conclusion of the investigation, the authorities issued a show cause notice to the appellants asking them to show cause as to why the amount of credit availed on the LDO be not demanded and reversed, why it is not held that the finished goods, which were found short are clandestinely removed and why the confiscation of the inputs, which were found excess than the recorded balance be not confiscated. The appellants contested t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the appellants. It is his submission that having not protested the stock taking procedure, today the appellant cannot dispute the correctness of such stock taking. It is his submission that once the finished goods were found short there cannot be any other presumption than clandestine removal of the said finished goods. 5. Considered the submissions made by both sides and perused the records. 6. It is seen from the panchnama dated 12/09/2003 that the authorities in the presence of panchas had recorded the physical stock taking which reads as under:- "Afterwards the Superintendent directed Shri Khan in our presence to take the stock of finished goods. Since the actual weight of the said finished goods was not possible the K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods. Likewise, the other allegation of excess of inputs also suffers from the same infirmity. The eye estimation of such a huge stock would definitely be erroneous. I find that the Tribunal in the case of Micro Forge (I) Pvt. Ltd., (Supra) had clearly in an identical situation held as under:- "It is an admitted fact that the stock position was arrived at on the basis of an estimation. The opinion of Shri A.N.Sinha, Works Manager was taken on the spot regarding the fluctuation in the weight of individual varieties of the forgings. There were in all 31 varieties in stock. In this connection I must mention that unless the department is in a position to clearly demonstrate the fact of shortage through actual physical weighment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and I do so. Consequently, the penalty imposed on the appellants on this issue is also liable to set aside and I do so. 10. As regards the amount of Rs.81,776/- reversed by the appellant towards inadmissible modvat credit on the LDO, the appellants is not contesting the same. Hence, the impugned order to the extent it upholds confirmation of the demand of Rs.81,776/- is upheld. 11. As regards the penalty imposed on the appellants, I find that the appellants had reversed the amount of inadmissible modvat credit and on the inputs and capital goods as soon as it was pointed out. Despite these it is seen that the appellants were having knowledge of the Central Excise Rules, and should not have availed the Cenvat credit on LDO capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
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