Case Law Details
Jai Balaji Industries Limited (Unit-IV) Vs Commissioner of Central Excise (CESTAT Kolkata)
CESTAT Kolkata held that the shortage ascertained during the course of stock-taking are on the basis of assumption and presumption. Accordingly, duty demand on account of shortage of finished goods unsustainable.
Facts- The assessee is having five units, but this matter relates to Unit No.I and IV of the assessees and one Shri Jai Salasar Balaji Industries Limited. On the basis of an intelligence that all these firms are evading payment of duty by way of suppressing their actual quantum of manufacture of excisable goods and subsequently removal of such unaccounted manufacture of finished goods, a search was conducted in their premises on 05.10.2008 on 13.30 hrs. The physical stock-taking of inputs and finished goods was conducted wherein shortage of finished goods was detected.
It was also alleged that the suppliers namely Neo Metaliks Ltd. and KIC Metaliks Ltd. issued 36 invoices to the appellant, but the assessees received only the invoices and not the physical goods which has been diverted and therefore, the assessees are not entitled to take Cenvat credit of 750 MT of Pig iron on the strength of 36 invoices issued by the above said suppliers. It was also found that the assessee has cleared melting scrap without payment of duty.
Further from the records, it was revealed that during the financial year 2004-05 the quantity of iron ore of 1,06,309 MT was consumed to manufacture 70,872 MT of Sponge Iron therefore, input output ratio works out to 1.50:1.
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