TMI Blog2009 (6) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... 65 is without merit. Further held that- However, in this exercise the assessee was handicapped for the reason that the documents evidencing movement of materials to adjacent unit for conversion to bright bars had not been furnished to them by the Revenue before the allegations were decided. The assessee was not furnished with these material documents; they were also denied cross-examination of mahazar witnesses. I find that the adjudication also involved failure to comply with the principles of natural justice by the authority who confirmed demands against the respondents and imposed a penalty on them. Thus, there is no reason to interfere with the impugned order vacating the demands and penalty made on sound grounds. The appeal filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Steels Ltd., Bombay for converting them into bright bars on their behalf. As the respondents faced difficulty in doing the job properly M/s. Mukand Steels Ltd. directed them to send the black bars received to M/s. Adwaith Steels Ltd. Accordingly, the respondents had cleared 284.085 MTs of black bars on payment of appropriate duty to M/s. Adwaith Steels Ltd. 18.13 MTs of bright bars had been cleared. There was a process loss of 18 MTs suffered by the inputs in their conversion to bright bars in the factory of the assessee. The Commissioner (Appeals) found that the above claims made by the respondents had not been contested by the original authority or by the Department during the proceedings before him. Thus, he found that the respondents h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jayant Extraction Industries Ltd. v. Additional Commissioner - 2004 (171) E.L.T. 501 and Godavari Steel (P) Ltd. v CCE - 2001 (134) E.L.T. 369. In these cases the Tribunal had held that physical shortage of finished goods with reference to the RG I led to inference of evasion. The department had validly raised demand of duty. The respondents had not properly reconciled the shortage and their varying submissions in this regard were not reliable. The appeal seeks to restore the order of the original authority. 4. In the cross-objection submitted the following grounds have been raised which are reiterated by the learned counsel for the respondents. The rec conciliation of stock made by the respondent was not contested by the original author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Commissioner (Appeals) arrived at the above finding on the basis that the respondents were not habitual offenders and that they had sufficient balance in the CENVAT credit. As the invoices were raised intention to evade cannot be found. I find that the respondents- manufactured only a quantity of 18.137 MTs of bright bars out of the inputs weighing 320.350 MTs. The Revenue has no case that the balance material was manufactured into any dutiable product. The respondents had the entire duty paid on the 320.350 MTs on black bars received as credit which could be used for removing inputs as such or for payment of duty on finished goods. The only quantity of finished goods manufactured and cleared during the period was covered by the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case. The assessee functioned for a couple of months after the visit of the officers and closed its operation in May 1997. It had taken credit of duty paid on 320.350 MTs of inputs. Since there is no allegation that the assessee had manufactured goods in excess of 18.13 MTs cleared to M/s. Lakshmi Machine Works the assessee could have cleared the balance inputs using the CENVAT credit earned by it. It would appear that the proceedings were initiated for the assessee's failure to reconcile the shortage at the time of visit of the officers. However, in this exercise the assessee was handicapped for the reason that the documents evidencing movement of materials to adjacent unit for conversion to bright bars had not been furnished to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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