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2024 (2) TMI 1013 - AT - Central ExciseNon-fulfillment of input output norms as per the allegation of the Department - defective PETs also should be considered as part of the output or not - Applicability of Note 2 of the SION - submission of the Appellant is that in the course of manufacture of PET even hypothetically speaking, no manufacture can produce 100% correct quality quantity of PET - time limitation - HELD THAT:- There are force in the Appellant’s contention that the Adjudicating Authority should have considered the defect PETs emanating in the course of their final manufactured product towards the SION fulfillment. It is also seen from the records that Note 2 was issued by the Committee after proper verification of the technical details furnished by the Appellant. This Note 2 cannot be treated as a new norm prescribed for the future manufacture only. This simply prescribes the norms for normal production which are being carried out by the Appellant all along. Therefore, the Adjudicating Authority is in error in taking the stand that this Note 2 cannot be applied for the goods manufactured during the past period. Time Limitation - HELD THAT:- So far as the Appellant’s submissions on limitation are concerned, there are force in the same. The Appellant was registered EOU and was filing the ER-2 and ER-5 Returns regularly and data contained in these Returns have been considered by the Department for issue of the Show Cause Notice. Therefore, allegation of suppression does not sustain. The Department has committed a grave error by issuing the second Show Cause Notice once again invoking the extended period. It is surprising that the Adjudicating Authority has relied on the Nizam Sugar Factory Larger Bench decision, after this LB [1999 (10) TMI 123 - CEGAT, NEW DELHI] was overturned by the Hon’ble Supreme Court long ago in NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [2006 (4) TMI 127 - SUPREME COURT]. In view of these facts, we hold that the confirmed demands cannot sustain for the extended period in respect of the both Show Cause Notices. For the confirmed demand in respect of the normal period, (March 2009 to October 2009), the matter is remanded to the Adjudicating Authority to consider the following facts. (i) Get the details of defective PET manufactured during this period and give the benefit of such quantities holding that they are part of the total manufactured quantity. (ii) Consider the amendment brought in under Note 2 of the SION and give the benefit to the Appellant. After considering these two issues, the net quantification is required to be done. If any demand is confirmed by the Adjudicating Authority after such re-quantification, the Appellant is required to pay the interest - Appeal disposed off.
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