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2008 (8) TMI 471 - AT - Central ExciseSuppression of production and clandestine removal demand of near about Rs. 7 crore based on theoretical calculation of ratio of raw materials to pulp and from pulp to paper demand arrived at on theoretical basis on basis of weigh bridge register, RT5 Formula of pulp quantity multiplied by 100.88 to arrive at quantity of paper basis of adoption of ratio 100.88 not clear Held that figures of another unit having modern machinery is not correct basis for arriving at clandestine manufacture and removal Revenue should have conducted experiment to arrive at ratio of raw materials to pulp and also to paper - Unless those figures arrived at by theoretical calculations are backed by concrete evidence, no demand can be made. As regards exemption for waste paper under Notification No. 47/83, no detailed finding regarding percentage of waste paper consumed in 1984-85 and1985-86 Collector referring to import of old newspaper and its diversion to various dealers Commissioner has not given any reason for rejecting calculations submitted by assessee - Held that merely on account of diversion of imported old newspaper, conclusion of less consumption of waste paper cannot be arrived held that exemption is available demand is not sustainable Paper submitted as cleared under Notification No. 163/67 dated 21-6-1967 for text books to Director of Public Instructions Investigations revealing that submitted amount not received by such Director allegation that certain clearances with fictitious gate passes and certain clearances for which exact detailed not given SCN not giving details of either fictitious gate passes/invoices further, there was no detail as to customers to whom paper cleared hence demand of nearly 18 lakh, is set aside Though majority of demand is set aside, wrong availment of exemption for part of the period was upheld penalty on director (who is involved actively in function of factory), is upheld - (a) We set aside the demand of Rs. 4,58,71,914/- on the alleged clandestine clearance. (b) We set aside the demand of Rs. 18,37,879/- on account of the alleged wrong availment of the Notification No. 163/67-C.E., dated 21-6-1967 for supply of paper for printing of news paper, text books, etc. (c) We remand the matter in respect of the demand of duty for the year 1983-84 for consumption of waste paper less than 50%. (d) We hold that the appellants are entitled for the benefit of Notification No. 47/83-C.E., dated 1-3-1983 therefore. (e) We set aside the demand of differential duty for the years 1984-85 and 1985-86 in respect of the consumption of waste paper less than 50%. (f) We set aside the confiscation of 891.16 MTs of paper. We also set aside the confiscation of land, building, plant and machinery used for the manufacture of paper. As a result, the redemption fines imposed are set aside.
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