TMI Blog2009 (3) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... hecks and verification. During the course of verifications of stock of raw materials, one of the raw material i.e. HD was found short to the extent of 9975 Kgs, as compared to the stock shown in RG-23A, Part-I register. The Director of the company, admitted the use of the same in the manufacture of water jugs cleared clandestinely without payment of duty. They also debited duty amount of Rs. 1,23,464/- in their modvat account. 2. On the above basis, proceedings were initiated against the appellants which culminated into orders passed by the authorities below. The matter was ultimately remanded by the Tribunal to Commissioner (Appeals) for fresh decision after considering the main ground of appeal raised by the assessee. The impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgments. (ix) Penal provisions under Rule 173Q(2) is applicable only in case of specific contravention of the nature enumerated at sub-clause (2) to Rule 173Q. The appellant submitted that there is no such contravention in the present facts of the case and there are no grounds for invoking such extra ordinary provisions. It is further submitted that the provisions of Rule 173Q(2) has been duly rescinded from the Central Excise Rules, 1944 much before the passing of order vide Notification No. 38/2000 (N.T.), dated 12-5-2000. (x) They further submitted in written submission that the demand is time barred since investigation being over on 15-7-96 and SCN was issued on 18-1-2000, after one year from the date of knowledge of facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reflecting the correct position. He also submits that inasmuch as the Modvat credit on the raw material is higher than the duty to be paid on the final products, there would not be any reason for them to indulge in the clandestine activities. He referred to various decisions of the Tribunal. 5. In the case of M/s. Kartar Steel Ltd. v. Commissioner of Central Excise [2003 (160) E.L.T. 495 (Tri. - Del.)], it was held that shortage of the raw material cannot be made the basis for raising the demand on the ground of clandestine removal, in the absence of any evidence of such conversion and removal. Similarly, in the case of Sunder Silk Mills Pvt. Limited [2003 (153) E.L.T. 176 (Tri.-Bang.)], the above stand was reiterated and it was held th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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