TMI Blog1999 (4) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... 504/- involving duty liability of Rs. 1501/-, with option to redeem the same on payment of fine of Rs. 1500/-. (b) confiscated finished goods valued at Rs. 98,574/- seized at the time of visit, which the assessees claimed as rejected goods returned by the customers, with option to redeem on payment of a fine of Rs. 25,000/-; (c) confirmed an amount of Rs. 19,98,179/- under Rule 57(1) on shortage of inputs on which Modvat credit had been availed and (d) imposed a penalty of Rs. 2 lakhs under Rule 173Q of the Central Excise Rules, 1944. 2. We have heard Shri J.P. Kaushik, learned Counsel and Shri D.K. Nayyar, learned DR and record our findings on the issues as under : (I) Excess and shortage of finished goods : The following items w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borative evidence to establish clandestine removal and therefore, we hold that the Department has not discharged the burden of proving clandestine removal of final products. We therefore, set aside the duty demand on finished goods found short and set aside the confiscation of excess stock of finished goods. (II) Finished goods claimed to be rejected goods : The appellants have stated that defective goods were sent back to their factory and they were not capable of being repaired and hence they were mutilated and converted into scrap which was being cleared on payment of duty. They have categorically stated that the Original Equipment dealers were returning defective items to them and dealers were replacing the defective goods to the cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in Plot No. 11. Therefore, the removal of inputs from the registered premises to the adjacent unregistered premises i.e. Plot No. 11 without applying and obtaining permission for the same, is a procedural violation which cannot result in denial of substantive right to take Modvat credit. We therefore, set aside the duty demand under this heading. (IV) As set out above, the appellants have not observed Central Excise procedure namely, they have not filed D-3 intimation in respect of the defective goods received back from their customers through their dealers and they have not intimated the Department about the removal of inputs on which credit has been taken from the registered premises to the unregistered adjacent plots. Hence for n ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
