TMI Blog2003 (11) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... the Shriram Institute for Industrial Research the percentage of PVC Resin was found to be 42.60 per cent; that, however, the Central Revenue Control Laboratory on testing the sample found the percentage of PVC Resin to be 43.9 per cent; that another sample was drawn on 17-1-2000 and as per Test Report of CRCL, the percentage of PVC resin was found to be 52.5%; that a show cause notice dated 12-4-2001 was issued to them for disallowing the Credit alleging that they had shown excessive use of suspension grade of PVC Resin that what was actually required; that the Commissioner has confirmed the demand and imposed penalties. 2.2 The learned Consultant, further, submitted that the entire demand is based on conjectures and surmises as the same has been raised on the ground that only 55% PVC resin should have been used by them for manufacturing PVC Compound; that no evidence has been led by the Revenue to show that actually only 55% PVC resin was used and the remaining quantity was removed as such; that in the absence of evidence of removal of PVC resin as such, the demand of duty is not sustainable. He also emphasized that each time, the test reports showed different percentage of PVC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... literature and the opinion of various persons, the percentage of resin varies between 40% to 70%; that the demand of duty has been calculated on the presumption that the percentage of resin in PVC compound is 55% only; that if at all the demand of duty can be made, it should have been calculated by taking the percentage of PVC resin as 70 per cent. 5.1 Shri K.K. Anand, learned Advocate, on behalf of M/s. M.C.I. (India), M/s. Shree Amar Chemicals and M/s. Vikas Industries, besides adopting the submissions made by Shri K.L. Rekhi, learned Consultant, mentioned that the allegations made by the Revenue are that emulsion grade PVC resin cannot be used in the manufacture of PVC compound meant for insulated wire and cables and that they have shown excess consumption of suspension grade PVC resin. He submitted that it has been held by the Tribunal in the case of Phosphate Co. Ltd. v. CCE, Calcutta-II, 1995 (80) E.L.T. 579 (T) that the demand entirely based on the assumption and inferences drawn on the basis of excess consumption in the absence of evidence as to clandestine removal is not sustainable; that Shri M.R. Sablok, General Manager, Sar Polymers Pvt. Ltd. has opined that both PVC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly mentioned in the invoices and as such Department was aware of use of emulsion grade PVC resin. 6. As the issue involved in Appeals filed by M/s. Vinica Plastic Pvt. Ltd., Shri Virendra Vashist, M/s. Monarch Polymer and Shri Manish Kumar Jain is similar, we do not accede to the request of the learned advocate for adjournment and take up the appeals for disposal after perusing the records. The charge against M/s. Vinica Plastic Pvt. Ltd. and their Director, Shri Virendra Vashisth is that they had mis-utilised Modvat credit by showing excessive use of suspension grade of PVC resin. The demand has been confirmed against them on the ground that only 55% PVC resin should have been used by them for manufacturing PVC compound. It has been submitted by them in their grounds of appeal that the entire duty demand is based on conjectures and surmises as no evidence has been led by the Revenue to show that actually only 55% PVC resin was used and the rest was removed as such; that the test reports have shown different results when the samples were tested thrice; that they manufacture PVC compound of three types and the lack of testing facilities and proper quality control, the percentage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esin in PVC compound meant for further use in the manufacture of wire and cables could be maximum up to 70%; that the use of PVC resin shown by all the Appellants is much more than the actually used in the manufacture of PVC compound; that the Adjudicating Authorities have allowed the consumption of 55 per cent of PVC resin in the manufacture of PVC compound on the basis of average of 40% to 70% of PVC resin normally used in the manufacture of PVC compound meant for further consumption by the manufacturers of PVC wire. The learned SDR finally contended that larger period of limitation for demanding duty is invocable as the Appellants have manipulated the records in order to avail higher Modvat credit and they have wilfully suppressed actual consumption of raw material with intent to evade Central Excise. 10. In reply Shri K.K. Anand, learned Advocate, mentioned that Shri M.R. Sablok has given an Affidavit after attending the office of the CCE, Delhi on 15-5-2002 for cross-examination; that he has mentioned in his Affidavit that in his cross-examination by the CCE, he had stated that in cable compounding PVC emulsion grade can also be mixed with suspension grade for wire and cable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is mentioned that there appears to be some mistake in conducting first test in CRCL....... Further, Revenue has not brought on record any evidence to show as to how the alleged excess quantity of resin had been disposed of. The Appellants have also contended that their machineries are not very sophisticated ones and in the initial stage they utilized more resin which subsequently has come down. This averment has not been specifically controverted by Revenue. The learned Advocates have also referred to the specifications agreed upon in a meeting between the PVC Compound Manufacturers and General Manager, Telecommunication, Quality Assurance, New Delhi. According to the Minutes of this meeting PVC Resin percentage would be 70% 5%. In view of this the Revenue cannot arbitrarily take 55% as the norm for demanding duty. The Revenue has not succeeded in proving that the Appellants have shown the utilization of PVC resin in excess than what is required as no tangible evidence has been adduced by it. It is settled law that the duty cannot be demanded on conjectures and surmises. The Supreme Court in the case of Oudh Sugar Mills Ltd. v. Union of India, 1978 (2) E.L.T. (J 172) quashe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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