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2009 (4) TMI 323 - CESTAT, BANGALORECharge of clandestine removal - assessee is aggrieved over the confirmation of demand on account of non-accountal of the quantity of scrap to the extent of 2602.500 MTs - it is very difficult to accept the learned advocate (for the assessee’s) contention that these 2602.500 MTs. were used for trading - Private records have been recovered from the residence of Shri Muralidharan, Production Manager and the Bills of the Labour Contractor, Shri A.K. Ranu have also been scrutinized. Shri Ranu has, in his statements, dated 11-11-1996 and 12-11-1996, confessed suppression of production and clandestine clearance. All these evidences point to the fact that SSL was systematically suppressing production of Ingots and Rolled products. In our view, there is enough circumstantial evidence to hold unaccounted production in respect of 2602.500 MTs. Even though, the original demand was very huge, the Commissioner has scaled it down only to the demand on account of non-accountal of 2602.500 MTs of scrap. In our view, it is a very fair decision and his order is sustainable. But, however, we find that he had not given any allowance for the Modvat credit. According to him, the scrap is converted into Ingots and the Ingots, in turn, is used in the production of re-rolled products. So, while coming to the conclusion on demand of duty, he has not given the benefit of Modvat credit and also the cum-duty benefit. In terms of the Hon’ble Supreme Court’s decision in the case of CCE v. Maruti Udyog Ltd. - 2002 (141) E.L.T. 3 (S.C.), this also should be given. In view of this, while upholding the demand of duty on account of non-accountal of the scrap to the extent of 2602.500 MTs, we remand the matter to the Commissioner for re-determining the duty liability.
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