Odisha Mining Corporation Ltd. Vs Commissioner of Central Excise (CESTAT Kolkata)
The appeal challenged Order-in-Original dated 31.10.2013 by the Commissioner of Central Excise, Customs & Service Tax, Bhubaneswar-II, which had rejected the appellant’s application for remission of Central Excise duty under Rule 21 of the Central Excise Rules, 2002.
The appellant, a manufacturer of Pig Iron, C.I./D.I. Spun Pipe and Iron Castings, stated that Pig Iron is inherently brittle and that Pig Iron Chips, Dust and Dross are inevitably generated during casting, mechanical handling, storage and intra-plant transportation, resulting in irrecoverable losses. The appellant further stated that physical stock was ordinarily determined by eye estimation, while sales were made on actual weight basis, making differences between RG-1 book stock and physical stock inherent. After the blast furnace remained shut from March 2011 to November 2011 for maintenance, production ceased but removals continued. During actual weighment conducted from 19.04.2012 to 25.04.2012, the appellant found the physical stock short of RG-1 stock by 5490.601 MT. The shortage was disclosed in the audited financial statements for FY 2011-12. Following an audit query, the appellant applied for remission under Rule 21, contending that the shortage represented accumulated irrecoverable handling losses from 2001-02 to 2011-12.
