2016 (6) TMI 568

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..... ect of shortages found, demand show-cause notices were issued seeking the reversal of credit of duty taken thereon. The demand show-cause notices were confirmed by both the lower authorities. Aggrieved by the order of the Commissioner (Appeals), the appellants are before the Tribunal. 2. Learned Counsel for the appellant pointed out all the details procedure of accounting as was reproduced in para 3 of the Order-in-Original, which reads as under: - "(i) that they take CENVAT Credit on the Cenvatable motor vehicle parts, components and assemblies received by them; (ii) that they operate under highly sophisticated SAP computer system having total documentation discipline for the inward and the dispatches of parts; (iii) that the stock .....

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..... have a huge and complex accounting? problem. It is beyond manual tally. The appellants have put in place sophisticated computer based accounting systems to ensure accuracy and efficiency. The evidence on record does not indicate any diversion of inputs in contravention of rules relating to utilisation of inputs. The demand is merely based on the shortages detected during physical tallying, that too without taking into account the excesses noticed. Since there is no evidence, that the excesses are not the result of clandestine receipt of inputs, the same view is required to be taken in regard to shortages also, that the shortages are not the result of any clandestine or unauthorised utilisation of the inputs. The shortages thrown up also do .....

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..... tion of the total input is in use. In addition we find that the respondent had pointed out that this was due to accounting errors and there was no shortage in fact because of the reason that in respect of many inputs even stocks in excess was found. It was demonstrated before the authorities that though the shortage of the inputs was to the tune of Rs. 25.67 crores, at the same time many other inputs were in excess and those figures were to the tune of Rs. 27.59 crores during the same period. This fact alone demonstrates the bona fides of the respondent in claiming the Modvat credit on the basis of figures disclosed by them in respect of the inputs which were used while manufacturing the motor vehicles. A finding of fact is recorded that .....

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