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2005 (2) TMI 422 - CESTAT, NEW DELHIDemand and Penalty - Clandestine removal - Alleged shortage of tyres and tyre cord fabric on the basis of standard input output ratio - HELD THAT:- It is not disputed by the Revenue that the shortage of nylon tyre cord fabric has been arrived at on the basis of consumption vis-a-vis standard input output ratio. There is no material or evidence, which has been brought on record, to show that the said raw-material was cleared from the factory without payment of duty or reversing the Modvat credit already availed of by them. There is substantial force in the submissions of the learned Advocate that the standard input output norms can be applied only in perfect conditions and not otherwise. In a similar situation in the case of Magnum Papers Ltd. (supra), the Tribunal did not agree with the Department that Modvat credit is deniable on the basis of comparison of the consumption of the raw-material during the current year and the preceding year. In the present matter also, the shortage of nylon tyre cord fabric has been only presumed on the basis of applying input output ratio and not on the basis of actual consumption. We, therefore, set aside the demand in respect of nylon tyre cord fabric. The penalty is imposable on the appellants on account of shortage of tyre which has been upheld against them. However, the penalty cannot be imposed on account of the shortage of nylon tyre cord fabric. We, therefore, reduce the penalty to Rs. 25,000/-. The appeal is thus partly allowed.
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