2000 (10) TMI 373

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..... out to job workers the rough forgings made by it to grind and otherwise finish them, in order to obtain the inner and outer rings (or races, as they are more correctly referred) of the bearings finished to the degree of precision required. In the course of this process, some amount of waste results, part of which is irrecoverable, being in the form of very fine particles that are blown away, the remaining being in the form of turnings and shavings. The latter was required, either to be cleared by the job worker on payment of duty, or to be returned to the appellant. The job worker did neither of these, but removed the scrap without paying duty. 2. Some time in 1989, the department asked the appellant to give details of the amount of s .....

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..... he Collector has confirmed the duty demanded in the notice and imposed a penalty on the appellant. 4. It will be evident from the above narration that there was at no time a clear determination by anybody of the extent of scrap generated. The appellant, in its letter of 12-3-1989, had referred to the approximate figure of 10%, which was accepted and acted upon by the department. It was also urged by the advocate for the appellant, and not rebutted by the departmental representative, that it was only during the proceedings before the Collector on the notice dated 4-2-1994 that the appellant was, by letter 19-12-1994 communicated a copy of the report of the officers who conducted the verification. This report, as a matter of fact, indic .....

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..... on of facts. We are, in point of fact, unable to see what great difficulty lay in ascertaining the amount of scrap. All that was required to be done was to weigh representative samples of the unfinished rings sent to the job worker, the finished rings obtained therefrom, and the scrap actually obtained. Why the department, instead of determining the percentage, chose to ask the appellant to determine and accept it blindly is beyond our understanding. Whatever be the reasons for this, having done so, we are of the view that the extended period of limitation cannot be invoked by accusing the appellant of suppression, more particularly when the department itself is unsure about the scrap generated relative to the material sent to the job worke .....

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