TMI Blog1991 (5) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... ly availing the benefit of exemption under Notification No. 191/80 dated 8-12-1980. 2. The appellants are the manufacturers of a wide variety of paper including printing and writing paper containing not less than 75% by weight of pulp made from bagasse. They had been availing of the benefit of Notification 191/80 under which printing and writing paper falling under TI 17(1) of the erstwhile first Schedule to the Central Excises Salt Act, 1944 containing not less than 75% by weight of pulp made from bagasse was exempt from the whole of the duty of excise leviable thereon. The appellants had filed classification lists for this purpose which were approved on 23-8-1984. A show cause notice dated 18-9-1985 demanding duty on the paper on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bagasse pulp and wood pulp used whereas the flow rate is more relevant. (c) The flow itself was maintained at 77% of bagasse and 23% of wood pulp to ensure that ultimately the ratio between the two was not less than 75 : 25. The Assistant Collector by order dated 30-6-1986 confirmed the demand disallowing the benefit of the exemption notification. The lower appellate authority having upheld the order of the adjudicating authority, the appellants have preferred this appeal before us. 4. The period of demand is from 15-9-1985 to 14-3-1986 and even during this period the benefit has been given except for certain number of hours for some days. It is significant to note that there has been no demand either for the prior or subsequent perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as acquiesced in the maintenance of records by the appellants in the same manner in which they were being maintained prior to the issue of the Trade Notice. Therefore, non-observance of the procedure set out in the Trade Notice viz. non-maintenance of Form A B Registers cannot be held against the appellants. 5. Regarding the discrepancies in the appellants own records the argument is that the valves are adjusted admittedly in 78 : 22 ratio and not 75 : 25 as wrongly prescribed by the Department. Regarding wood pulp there is time synchronising inasmuch as the reading is taken every two hours. Regarding bagasse pulp the reading is taken as and when the tank is empty and full. The Department has taken intermediate reading in the account f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistency register for the above-said dates showing consistency of bagasse pulp and wood pulp. (iii) Illustrative copies/page from log book for 14-1-1986 17-1-1986 showing sealing of the valves by Central Excise Officers for bagasse and wood pulp in the ratio of 78 : 22. (iv) Illustrative pages establishing mixing ratio as 79 : 95 : 20.5. (v) Flow chart 8. Log books in question have been maintained as per the directive and with the concurrence of the Assistant Collector and other Central Excise Authorities. Maintenance of these documents was totally with their knowledge as is evident from the fact that these log books have been signed on a daily basis after checking factual position. Monthly returns in Form C were also regularly fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is arrived at. The machine production is taken at actuals for that day. Thereafter the percentage of bagasse pulp content is arrived at. Whenever percentage is more than 75 exemption is availed. These calculations are checked and approved on a daily basis by the officer posted in factory. The pipelines carrying bagasse pulp and the wood pulp are fitted with valves to control the flow of the pulp fed to the blending chest where mixing of pulp takes place. The valves are sealed by the Central Excise officers posted to the factory as is evident from the illustrative photo-copy of log books. The authorities have calculated the demand inter alia on the following assumptions in the present case : (i) The assumption of the Department is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... themselves on a day-to-day basis. However, in the present calculations adopted by the Department in the impugned order, no adjustments whatsoever have been made for the opening balance and closing balance for the period of time considered by them. (vi) It is not correct for the Department to hold that sealing of the valve and 78 and 22 is averaging for the entire day as there is no averaging involved. In fact it represents sealing of the valve to the blending chest of the two sources of pulp. The log book records show that the sealing has been done by the Central Excise Officers. 9. From the above discussion, it is seen that the calculations of the Department are based on assumptions without a reasonable basis, and, therefore, the deman ..... X X X X Extracts X X X X X X X X Extracts X X X X
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