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2020 (2) TMI 1252 - AT - Central ExciseViolation of condition of N/N. 5/99 CE dt. 28.02.99, 6/2000 – CE dt. 01.03.2000 - concessional duty on clearances of sheets and pipes subject to the condition that the products should have contained not less than 25% by weight of fly ash or phosphorous Gypsum or both by usage, is denied - denial on the ground that actual weight mixtures report seized from the factory and production shown in the actual wet mixture, the goods contain fly ash less than 25%. HELD THAT:- The exemption notification in question i.e 5/99 – CE dt. 28.02.99, 6/2000 – CE dt. 01.03.2000 and other analogues notification during the material time provided exemption to the goods falling under chapter 68 of the CETA of Description “Goods, in which not less than 25% by weight of fly-ash or phosphor-gypsum or both have been used” subject to condition of maintenance of proper accounts. The undisputed position emerging from actual production and consumption based upon actual wet mixture reports the use of Fly ash in Sheets were above 25%. The CBEC vide Circular No. 6/92 dt. 21.10.92 clarified to maintain shift wise register for ascertaining the percentage of fly ash in final product. Vide Circular No. 477/43/99 – CX.4 dt. 10.08.99, the Board clarified that the percentage by weight of fly ash has to be calculated taking into account the weight of fly ash used with reference to the weight of the finished product in dry condition. It is an accepted position of revenue that weight of fly ash used should be with reference to the weight of the finished product in dry condition and thus the percentage of fly ash has to be determined with respect to weight of finished goods without moisture content. In case of ETERNIT EVEREST LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [1999 (8) TMI 888 - CEGAT, NEW DELHI], the percentage use of raw material was Asbestos fibre 5% to 9%; Pulp 1.5% to 2%, Cement 50% to 55%, Fly ash 35 to 36%; H.G. waste 1.5% to 2%. The tribunal held that the weight of goods with respect to which the percentage has to be arrived at should be determined as if no water is contained in these goods - In the present case the raw material for use in production i.e fly ash, cement, pulp and asbestos fibre are bone dry. The water used in process has to be ignored for computing the ash percentage and weight of finished goods. Since the fly ash used in production is more than 25% as is apparent from the wet mixture content report, therefore it has to be considered that the goods fulfil the condition of the Exemption notification. The fly ash content in sheet is more than 25% and the Appellant are eligible for the exemption on Asbestos Sheet. However in respect of some quantity of Asbestos Sheet it was admitted by the appellant that fly ash quantity is less than 25% on which duty liability comes to ₹ 2,80,000/- which is liable to be upheld - Accordingly duty demand of ₹ 21,31,29,778/- in respect of Asbestos Cement Sheet and corresponding, Interest and penalty are set aside. Asbestos pipes - HELD THAT:- The Appellant could not establish that the contents of fly ash in asbestos pipe are more than 25%. Unlike in sheet, the use of fly ash in pipe is much lower than 25% even after excluding the water content. The appellant also not pressed much upon the issue related to pipe - the duty demand on the Asbestos Pipe shall be re-quantified after allowing the benefit of cum duty price and modvat credit. Confiscation of Asbestos Cement pipe and sheets - HELD THAT:- The appellant in the various correspondences informed the department regarding the stage of making entries in RG-1. It is also observed that the appellant, apart from RG-1 register have been maintaining various other records such as Wet Mixture Reports, Daily Production Reports/Register, Physical Lab Register, General shift furnishing report, Stock register,RG-1 register. Maintenance of these records were not in dispute, as some of these records were relied upon in show cause notice raising the demand, therefore, it cannot be said the stock of goods not entered in RG-1 register is with intent to clear the goods without payment of duty - the adjudicating authority has erred in confiscating the goods on the pretext of non accountal of the same in RG-1 register - Confiscation alongwith redemption fine set aside. Personal penalty imposed upon various persons related to the appellant company - HELD THAT:- The penalty was imposed commensurate to the quantum of total duty and in view of gravity of offence. The duty demand has been reduced substantially and the issue involved is of interpretation of notification, therefore the personal penalty also need to be reduced - quantum of penalty reduced. Appeal allowed in part.
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