TMI Blog2009 (2) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... ls. There is also no admission in the said statements to the effect that raw materials stand diverted in the open market. Even the experiments conducted by the Department in the presence of the officers showed variance quantity of used raw materials than the input-output norms. All these factors lead to show that the findings arrived at by the adjudicating authority are on the basis of assumptions and presumptions and in the absence of any independent evidence, cannot be upheld. Extended period of limitation - Held that: - where demands have been worked out from the RT12 returns furnished by the appellants, extended period would not be available to the Revenue as suppression of material facts cannot be attributed to the assessee. Appeal allowed - decided in favor of assessee. - E/3127-3129/2005 - A/456-458/2009-WZB/AHD - Dated:- 24-2-2009 - Ms. Archana Wadhwa, Shri B.S.V. Murthy, JJ. REPRESENTED BY : Shri V. Sridharan, Advocate, for the Appellant. Shri R.S. Sarova, JDR, for the Respondent. [Order per : Archana Wadhwa, Member (J)]. All the three appeals are being disposed by a common order as they arise out of the same impugned order passed by CCE, Daman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous raw materials required to be used in one batch of their final product. The statement of Shri Rajesh Kr. Dube, Lab Assistant was also recorded on 29-1-2004 giving details of the requisite of raw materials. 6. From the above, Revenue entertained a view that (a) To manufacture one batch of DOP by the unit, the raw materials required are Phthalic Anhydride 3700 kgms. and 2-EHA 6500 kgms. (b) To manufacture one batch of DBP by the unit, the raw materials required are Phthalic Anhydride 6300 kgms. and Iso Butyl Alcohol/Normal Butyl Alcohol is 6300 kgms. (c) Even though the chemical proportions for DOP and DBP are as above, the unit wilfully showed issuance of excess quantity of raw materials as shown in Annexure-A to D, with an intention to evade Central Excise duties. (d) The unit wrongly availed Cenvat Credit of Rs. 4,44,445/- on Bs/E No. 786/8-9-2003 and 578866/18-6-2003, against which no raw materials has been received by the unit, and camouflaged the consumption of the same by manipulating quantity of raw materials issuance in the Stock Register and RG23-A Pt.-I registers. (e) Shri Vijay Katyal, the Director of the unit, wilfully and knowingly supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the actual requirement of the final product for respective batch. The excess inputs used in the final products varies from batch to batch, which can be seen from the RG-23A Pt.I Register Form-IV Register, that there is different raw material requirement for each batch in last four years and there is no constant ratio of inputs for the manufacture of actual production of the final products. They therefore submitted that the practice and theory for the manufacture of the final products is quite different as it depends upon several factors like quality of the raw materials, moisture contents in PAN etc., chemical reaction process, electricity fluctuation and several other factors for the manufacture of the final products of each batch at the material time. Thus, they submitted that they have made actual production which is registered in RG-1 Register and there is no dispute of the department as regards to the final products accounted for in their RG-1 Register. They submitted that the admissibility, eligibility and utilization of Modvat credit is not based on one to one input-output ratio and therefore Modvat credit cannot be denied. (v) They are manufacturing DOP DBP of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of mathematical equation between inputs utilization and finished goods manufactured. (xi) That the show cause notice is based on assumptions and presumptions and without considering the actual utilization of raw material for the respective batch, cannot be upheld. (xii) That the entire information as contained in the RG23A Register along with Form IV Register and RG-1 Register was the subject of the audit and was being regularly supplied to the Revenue and no objection was ever raised at any point of time. As such they contented that the demand if barred by limitation. (xiii) However, they admitted that the Modvat credit under bill of entry dt. 8-9-2003 and 18-6-2003 was wrongly availed and by paying the same immediately they have shown their bona fide. (xiv) They also requested for cross-examination of the investigating officer as also the panchaas. 9. The Commissioner, while adjudicating the notice referred to the statement of Shri Rajesh Rai, wherein he disclosed the quantities of various raw materials required for manufacture of one batch of their final product. He also referred to the quantum of raw materials actually used on the date of visit of the offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. In the case of M/s. Suzlon Fibres Ltd. [2008 (230) E.L.T. 166 (Tri. Ahmd], it was observed that the case of clandestine removal cannot be made on the basis of input-output ratio and is required to be corroborated by an independent evidence. Thus by relying upon the precedent decision of the Tribunal in the case of M/s. Hindustan Coca Cola Beverages Pvt. Ltd. [2006 (205) E.L.T. 700 (Tri)], the demand was set aside. Similarly in the case of M/s. Ghodavat Pan Masala Products Ltd. [2004 (175) E.L.T. 182 (Tri.-Mum.)], it was observed that theoretical calculations based on minor inputs without tangible, strict, positive, direct and corroborative evidence to show that goods produced in excess removed or transported, the allegations of clandestine removal cannot be upheld. To the same effect is the Tribunal s decision in the case of M/s. Parle Beverages Ltd. [1999 (114) E.L.T. 872 (Tri.)], it was observed that there is no contractual obligation on the part of the assessee to strictly adhere to the formula. The object of the formula is to ensure consistency of the product in different batches and in each bottle of the same batch. It is therefore, more of a working guide than an inflexi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng filed by the assessees along with copies of RG23A Part-I and II and the figures are adopted by the Department from such records and duty demanded itself is based upon statutory records maintained by the assessee, it cannot be said that there was any suppression or misstatement on the part of the assessee with an intention to evade payment of duty and extended period of limitation cannot be invoked in such circumstances. Reference in this regard is made to the following decisions :- (a) Air Cargo Corporation v. CCE [2008 (229) E.L.T. 80 (T)] (b) DCM Engineering Products v. CCE [2002 (147) E.L.T. 820 (T)] [Affirmed by Hon ble Supreme Court vide 2003 (153) E.L.T. A301 (S.C.)] (c) Pranav Vikas India Ltd. v. CCE [2002 (148) E.L.T. 963 (T)] (d) Asoka Spintex Ltd. v. CCE [2004 (171) E.L.T. 59 (T)] (e) ITO v. Lakhmani Mewal Das [1976 (3) SCC 757] (f) Oscar Pharmaceuticals Ltd. v. CCE [2004 (177) E.L.T. 1087 (T)] (g) Bharat Heavy Electricals v. CCE [1997 (18) RLT 573] (h) IOC v. CCE [2003 (55) RLT 732] (i) ITI Ltd. v. CCE [2001 (45) RLT 163]. 13. The ratio of all the decisions is to the effect that where demands have been worked out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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