ORDER
Archana Wadhwa, Member (J)
1. After hearing from both sides, I find that a short issue is involved in the present appeal. The appellant is a registered dealer dealing in the plastic granules of various grades and variety, for which purposes they are maintaining a RG 23D records. Though the appellant has three separate registered godowns but they were maintaining one consolidated RG 23D record in their Head Office in respect of the three godowns.
2. Their records were searched by the Central Excise Officer vis-a-vis the stock position and it was found that there were shortages of inputs involving duty to the tune of Rs. 23,233.00. The said stock taking was done in the presence of the appellants’ Representative. The appellants put a remarks in their records that “the minor discrepancies in quantity of individual product of small shortages in stock is due to counting mistake of huge stock” Shri Rudhra submits that their third godown was not put to search and it might be that the shortages found in two godowns were lying in excess in the third godown. He also submits that the shortages are marginal to tune of 1.997 MT which are ignorable keeping in view the huge quantity of granules they deal with. The percentage of the shortages came to only 0.03%. He also submits that the appellants are issuing non-cenvatable invoice also, apart from cenvatable invoices. Whenever they issued non-cenvatable invoice, they are debiting the credit in their records. As such the allegation of the Revenue that the credit of Rs. 23,233 would be passed on to their buyers in contravention of the provisions of law, cannot be sustained. For identical reasons, he prays for setting aside the imposition of penalty upon them.
3. Shri N.K. Mishra, Ld. JDR appearing for the Revenue submits that the shortages have been detected at the time of visit of the officers when the stock taking was undertaken in the presence of the appellants. There is no counter evidence produced by the appellants to show that such shortages were not real but pseudo.
4. I have considered the submissions made by both sides. I take note of the fact that the appellants dealt with in huge quantum of plastic granules of various sizes, grades and variety. Shortages so detected by the Revenue on their visit in the godown are in respect of four such varieties of the granules and in each variety have been found to be less than 1 MT. However, compared to the overall stock position of each and every variety, such shortages would be negligible and hence ignorable. I have also taken into consideration the appellants’ stand that they are issuing non-cenvatable also. As such earning of credit on the basis of manufacturers’ invoice without actually having receipt the goods in their godown is not going to be any benefit to the appellants. I also note that the stock was also lying in the third godown which was not put to verification so as to arrive at the correct stock position.
5. By taking all the facts into consideration, I extend the benefit of doubt and
allow their appeal with consequential relief to the appellants. Stay Petition also
gets disposed of.