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134 EXCISE LAW TIMES [ Vol. 372

him or his company for the said transaction. No incriminating documents were
found during the search. Learned Advocate relied upon the decisions of CCE v.
Juhi Alloys Ltd. - 2014 (302) E.L.T. 487 (All.), wherein it is held that the appellants
are not required to go beyond the supplier of the raw material/input to ascertain
as to whether they are eligible for Cenvat credit or not. The appellants had paid
the price of the inputs/raw materials to the supplier M/s. JBCPL and M/s. Alka
Creations (P) Ltd., which were the registered dealer with Central Excise Depart-
ment. Regarding the duty demand of Rs. 8,58,107/- on the alleged shortage of
156.894 MTs of SS flats, it was submitted by Learned Advocate that this was
merely on the basis of eye estimation as it would not have been possible for the
officers to conduct stock taking in less than 8 hours during the search and sei-
zure. It was also submitted that stock taking of stock of SS flats were made but in
the Panchnama the department has taken the stocks of billets and its weight,
which was their raw materials. The appellant never sold any billets and same
were capitvely used for the manufacture of SS flats. Hence, conclusion drawn by
the Ld. Adjudicating Authority is completely erroneous and not sustainable.
Even if it is held that there was a shortage of billets, the same would not amount
to clearance of finished goods without payment of Central Excise duty. As there
is no case of clandestine removal, duty demand of shortage is erroneous. Reli-
ance was also placed on case laws in the case of :
(i) Beco Industries Ltd. v. CCE, Jamshedpur - 2000 (121) E.L.T. 650;
(ii) Pacific Granites Ltd. v. CCE, Jaipur - 2001 (128) E.L.T. 421 (Tri.-Del.);
(iii) Commissioner of Central Excise, Allahabad v. IOC Ltd. - 2014 (300)
E.L.T. 153 (Tri.-Del.);
(iv) Commissioner of Central Excise & Service Tax, Ludhiana v. Anand
Founders & Engineers - 2016 (33) E.L.T. 340 (P&H).
In any case the percentage difference of shortage was only to the extent of 1.78%
which is as per the permissible limit in accordance with Second Schedule to the
Standard of Weights and Measures (Packaged Commodities) Rules, 1977.
8. Regarding the penalty imposed on Shri Subhash Chander Kathuria,
the Managing Director of the appellant company under Rule 26 of the Central
Excise Rules, 2002 read with Rule 15(2) of the Cenvat Credit Rules, 2004, it was
submitted that Rule 26 can only be invoked if the goods are held liable for confis-
cation and since there was no proposal in the show cause notice, to that effect, no
penalty could be imposed on him.
9. Regarding departmental appeal for dropping the demand against
M/s. Maa Beri Steel Co., Jodhpur, by the adjudicating authority has given 18
grounds for dropping the demand. However, the department has chosen to con-
test the appeal on two grounds only. In para 33 of the impugned order, Ld. Ad-
judicating authority relied on RUD 2.4.3A, which was also been relied by the de-
partment to substantiate their claim that cash amounts, over and above the in-
voice value, were remitted by the dealer to the appellants. However, Learned
Commissioner held that in a number of entries in that documents, it is mentioned
that the amounts were paid to the appellants as freight charges and since in the
other parts of the same document nothing of that are there that these towards
alleged bhada payment. The Learned adjudicating authority has taken all the
payment towards freight charges, which is wrong as the document has to be ei-
ther accepted in full or rejected as a whole. The department’s stand that some
payments were made towards the extra value of the goods and some towards the
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