TMI Blog2001 (10) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed of by this common order. 2. The appellants were engaged in the manufacture of rigid PVC pipes falling under sub-heading No. 3917.00 of Central Excise Tariff (hereinafter referred to as the Pipes ), out of duty paid inputs, and were availing the benefit of Modvat credit under Rule 57A of the Central Excise Rules, 1944 (hereinafter referred to as the Rules ). On verification of their stocks on 31-12-97 by the Central Excise Officers, shortages of 67,831 Kgs. of pipes were found. Certain shortages were also noticed in the stocks of inputs. In the show cause notice dated 30-7-99 after invoking the extended period of limitation, it was alleged that the pipes found short in accountal had been removed without payment of duty. The Joi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter. As mentioned in the show cause notice; the Central Excise officers had visited the factory premises of M/s. Sober and had detected a shortage of 67,831 Kgs. of pipes on 31-12-97. Certain shortages were also noticed in the stocks of the inputs. Some paper slips were recovered from the premises of the assessee and on the basis of these paper slips, duty amount has been calculated. On the basis of weighment slips, a further demand had been made. In addition, on the basis of the slips recovered from the Dharamkanta, certain duty liabilities were made against the appellants. 5. The appellants had pleaded that the paper slips, weighment slips, etc. were not maintained in the regular course of their business. They were rough jottings by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government Department and other known parties and the proper Central Excise duty had been paid thereon. 6. As regards the alleged shortages in the stocks of inputs and the pipes, it was submitted that the goods were not physically verified and no weighment was made. It was just an estimate. The pipes were not of uniform length or weight, and without actual weighment, it could not be said that there was any shortages. No panchnama was drawn. The statement of Shri Sudesh Gupta, Director was recorded under threat. In their communication dated 21-1-98, the assessee had lodged protest about the method adopted for arriving at the shortages and had submitted that in fact, there were no shortages. It has further been submitted that the balances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions of the appellants in this regard. The various paper slips, weighment slips, etc. had not been verified with reference to the transactions of the appellants. It is also not clear from the impugned order as on what basis a view was taken that there had been excess consumption of raw materials, excess clearance of PVC waste, etc. 10. For invoking the extended period of limitation, the show cause notices contained the following reference :- The provisions of proviso to sub-section (1) of Section 11A of the Central Excises Act, 1944, appear to be applicable to this case as the assessee concealed the material fact regarding the production and clearance of the excisable goods. They did not account for the goods and cleared the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quantity of PVC pipes and PVC scraps without his knowledge. 11. We consider that these general observations are not adequate for justifying the demand for the period May 97 to Dec. 97 under show cause notice dated 30-7-99. 12. After going through the facts on record and the discussion as made in the order-in-original and the impugned order-in-appeal, we consider that the demand has been made without adequate basis. On the basis of material on record, we consider that the demand is not sustainable. We also consider that in the facts and circumstances of the case, there was no justification for imposing the penalty including the penalty on the Director. 13. Taking all the relevant facts and considerations into account, we allow both t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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