9911796707
TMI Blog2024 (6) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant on a theoretical variance in the inputs.' Time limitation - HELD THAT:- The show cause notice in the present case has been issued only on the basis of audit and no further inquiry/investigation was done. Further, the appellant has been regularly filing returns and was subjected to audit from time to time and has not suppressed any material with intention to evade payment of duty. In view of these facts, the entire demand in the present case is barred by limitation. The impugned order is not sustainable in law and is set aside - appeal allowed. - HON BLE MR. S. S. GARG , MEMBER ( JUDICIAL ) For the Appellant : Shri S. J. Vyas , Advocate For the Respondent : Shri Ravinder Jangu , Authorized Representative ORDER PER S. S. GARG The present appeal is directed against the impugned order dated 12.10.2022 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has rejected the appeal of the appellant and upheld the Order-in-Original. 2. Briefly the facts of the present case are that the appellant is engaged in the manufacture of Medicaments falling under Chapter Heading 3004 of First Schedule to Central Excise Tariff Act, 1985 and are availing Cenvat Credit fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information and reporting. 6. He further submits that the records of the appellant are strictly maintained and are also subject to verification by drugs authorities. He also submits that the certificate of Chartered Account brings this fact on record which clearly certified that there is no write off of input; but this certificate was not considered by lower authorities. He also submits that variance is only 0.28%. He further submits that the finding is that the value was written off prior to its use in factory, being shortages noticed but this finding is incorrect. He further submits that this issue is no more res integra and has been decided in favour of the assessee by the following decisions : 2004 (4) TMI 197 CESTAT, Banglore Hindustan Zinc Ltd. 2014 (11) TMI 779 Andhra Pradesh High Court Commr. Of Central Excise, Visakhapatnam- I Versus Hindustan Zinc Ltd. 2013 (3) TMI 114 Rajasthan High Court Union of India Versus M/s. Hindustan Zinc Ltd. And Another 2021 (11) TMI 830 CESTAT Mumbai, M/s TATA Motors Ltd. Versus Commissioner of Central Excise, Pune-I. 7. Ld. Counsel further submits that the impugned demand is barred by limitation. He further submits that the demand is based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r operations, it is not practicable to have conventional method of book keeping i.e. to receive, store and issue inputs and strike balance of these transactions on daily basis in a register. In order to handle such volume of transactions, they have put in place sophisticated computer based accounting system to ensure accuracy and efficient. The entries regarding receipt of inputs are made at receipt point where the consignments are inwarded and after sample checking of quality and invoiced quantity, Goods Inward Note (GIN) is prepared, thereafter the acceptable inputs are stored in the allotted Bins. As per the learned counsel errors can creep in for many reasons like picking up wrong LH/RH parts, dispatch of alternate parts, incorrect posting to alternate parts etc. Also there may be errors in noting down various types of parts during physical stock verification, parts not available at the time of stock taking at its specified storage rack but subsequently found in another storage rack. He also submits that the shortages/ excess are only theoretical since they follow total documentation discipline with respect to receipt of inputs and consumption of inputs and the value of inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the total input is in use. It is settled principle that Tax Authorities should go by the normal commercial practice. We are also aware about the submission of learned counsel that this was due to accounting errors and there was no shortage in fact as in respect of many inputs even stocks in excess was found and also some of the parts which were not available at the time of stock taking at its specified storage rack, subsequently found in another storage rack. It is not the case that the inputs which were found short were not received or were clandestinely removed. We also cannot lose sight of the fact that there were excesses also in inputs which were brought to the notice of the department but these excesses were ignored by the department. This fact itself establishes the bonafide of the appellants in claiming CENVAT credit on the basis of figures disclosed by them in respect of inputs which were used by them. Although there is a finding that the appellants have suppressed the facts with intent to wrongfully avail and utilize the inadmissible Cenvat credit, but the same has not been substantiated by producing any evidence. Merely making allegations of suppression or intent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Id. Counsel, this Tribunal has decided the issue relying on the decision of Maruti Udyog Ltd. [2004 (173) E.L.T. 382 (Tri.-Del.)] which was upheld by the Hon'ble Apex Court reported in 2015 (319) E.L.T. 549 (S.C.) held as under: 4.1 I find that the case of the appellant is squarely covered by the decision of the Hon'ble Supreme Court in case of Maruti Udyog (supra). The only difference is that In case of Maruti Suzuki, value of excess found was greater than the value of shortages, whereas in the instant case the value of shortages is higher than the value of excess. Insofar as the value of shortages ranging from 0.01% to 0.21% whereas the excess ranging from 0.01% to 0.08% of the total procurement of parts. I find that the Tribunal in its decision in case of Maruti Udyog Ltd. (supra) has not relied on quantum of shortages are excess, but has relied solely on minuscule percentage of shortages found. The Hon'ble Supreme Court also has relied on the percentage of shortages found. However, as an additional argument, the Hon'ble Supreme Court has observed that the fact that shortages of input was less than the excess of input found demonstrate the bona fide. 5. In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustain a finding that this is a case of irregular or incorrect taking or utilisation of credit. In such a situation, no demand can be raised under Rule 57-1. The demand is accordingly, set aside and appeal is allowed with consequential relief to the appellant. Amounts already deposited by the appellant, on account of this dispute, shall be returned to it. Hon'ble Supreme Court while confirmed the decision of the Tribunal has observed as follows:- We find from the reading of the impugned order of the Tribunal that the Tribunal has discussed in detail the accounting system of the respondent. The magnitude of the inputs used and the discrepancy which arose because of the various factors, on that basis it is stated that when the shortage of inputs as corrected is only 0.24%, that would be immaterial and correction 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 25.67 crores, at the same t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
