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2017 (7) TMI 392 - AT - Central ExciseClandestine removal - manufacture of mild steel drums on job work basis - The steel drums manufactured by the appellant is meant for use by the HPCL for packaging of their final product namely asphalt. Being adjacent factory, the appellant clears the finished goods through conveyor belt to HPCL - Held that: - the MRR is prepared on quantity of drums filled with asphalt due to which there was a mismatch and the same was pointed out by appellant. With this fact without any other tangible evidence merely on the basis of difference between the MRR and GP1 quantity, the charge of clandestine removal cannot be accepted. There is a force in the argument of the Ld. Counsel that when excise duty paid by the appellant is available to the HPCL as modvat credit, there is no gain or loss either to the appellant or to the HPCL. Therefore no purpose would have been served to the appellant and/or HPCL for clandestine transaction of the drums. The exercise of payment duty of by the appellant and taking credit by the HPCL is of revenue neutrality for this reason also the demand is not sustainable. In case of revenue neutrality, demand is not sustainable. The revenue could not establish, beyond doubt the charge of clandestine removal against the appellant. Therefore the demand of duty penalty and interest confirmed against the appellant is not sustainable - appeal allowed - decided in favor of appellant.
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