TMI Blog2009 (9) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... aged in manufacture of Cable Filling Compound classifiable under sub-heading 3824.90 of the First Schedule to the Central Excise Tariff Act, 1985 and were availing Modvat credit facility under Rule 57A of the Central Excise Rules, 1944 in respect of the inputs declared by them as being used in their final product. The inputs declared included Low Density Poly Ethylene, Linear Low Density Poly Ethylene, High Density Poly Ethylene, Microfine ADC LAD, Pentaerythritol, Master Batch Organic, Master Batch Inorganic, Poly Propylene, Dioctyl Pthalate (DOP) and Dibutyl Pthalate (DBP). 5. Having received intelligence report that some of the declared inputs were not being actually used by the appellants in or in relation to the manufacture of their final product, the investigation was carried out. Pursuant to the said investigation, on allegation that the inputs like LDPE, LLDPE, Atatic P.P. copolymer, DBP Plasticizer Penta Erythrotal were not being used in or in relation to the manufacture of the final product, a show cause notice dated 2-5-2000 in relation to the period commencing from October, 1999 to March, 2000 came to be issued demanding the amount of duty to the tune of Rs. 48,23,256 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on record in the form of chemical test report as well as the cross examination of the expert rather than lending any support to the allegation on the part of the Department about non utilization of the inputs in question in or in relation to the manufacture of the final product by the appellants, establish the case put forth by the appellants. He further submitted that the statutory documents which were required to be maintained in the form of returns clearly disclose the inputs utilized in the manufacture of the final product by the appellants as also the credit availed in respect of duty paid on such inputs. The documents seized by the Department which have been produced in the course of the adjudication also disclose the stock of such inputs which was available with the appellants at the time of the seizure of records and the quantity of the stock in relation to such inputs clearly tally with the records relating to the utilization of such inputs in the manufacture of the final product out of the total quantity of such inputs procured by the appellants. He further submitted that though the first chemical test report does not disclose actual utilization of the inputs in qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty. He further submitted that, neither the provisions of Rule 209A were attracted nor there could have been independent imposition of penalty against the partners and authorized signatory, once the partnership firm is subjected to imposition of penalty. He has placed reliance in the decisions in the matter of Eagle Mineral Products v. Collector of C.Ex. reported in 1988 (38) E.L.T. 315 (Tribunal), Thacker Pulverising Co. v. Collector of Central Excise, Rajkot reported in 1997 (94) E.L.T. 359 (Tribunal), Nizam Sugar Factory v. Collector of Central Excise, A.P. reported in 2006 (74) RLT 564 (S.C.) = 2006 (197) E.L.T. 465 (S.C.) = 2008 (9) S.T.R. 314 (S.C.), ECE Industries Limited v. Commissioner of Central Excise, New Delhi reported in 2004 (164) E.L.T. 236 (S.C.), P B Pharmaceuticals (P) Ltd., v. Collector of Central Excise reported in 2003 (55) RLT 275 (S.C.) = 2003 (153) E.L.T. 14 (S.C.), Mahindra Ugine Steel Co. Ltd., Ors. v. CCE, Pune and Vice Versa reported in 2007 (80) RLT 55 (CESTAT-Mum.) = 2007 (211) E.L.T. 73 (Tribunal) and Vikas Metal Works Ors. v. CCE, Mumbai-III reported in 2005 (70) RLT 181 (CESTAT-Mum.). 9. Learned Joint CDR on the other hand submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f limitation. He also submitted that in Nizam Sugar Factory case there was no suppression of facts, and the facts were to the knowledge to the authorities whereas in the case in hand the fact that the alleged inputs were not being utilized in or in relation to the manufacture of the final product was not to the knowledge of the Department till it was revealed in the course of investigation and, therefore, the decision in Nizam Sugar Factory case is not applicable to the matter in hand. 10. The main point which arises for consideration is whether the product in the nature of Atatic Poly Propylene and Pentaerythritol were utilized in or in relation to the manufacture of the Cable Filling Compound by the appellants during the relevant period. Undoubtedly, the primary burden in that regard lies upon the Department when the claim of the assessee based on statutory documents, about utilization of a particular product as the input in or in relation to the manufacture of final product by him is sought to be disputed by the Department. In a case where the analysis of final product apparently discloses the presence of the inputs alleged to have been used in or in relation to the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Along with the above materials on record, it is an undisputed fact that the appellants were time to time disclosing under the statutory documents about utilization of the product in question in the process of manufacture of their final product and were also availing Modvat credit in relation to the duty paid on procuring the such products as the inputs for the final product. It is also undisputed fact that the procurement of such inputs was reflected from time to time in the stock register maintained in respect thereof by the appellants. It is not the case of the Department that the balance quantity of the inputs which was available at a time of inspection of the premises of the appellants was not tallying with the stock register maintained by the appellants. As rightly pointed out by the learned Advocate on behalf of the appellants that there is no allegation that any part of such inputs were clandestinely removed from the premises of the appellants or were utilized for any other purpose. There is no evidence on record to show that such products utilized in the process of manufacture of the final product cannot loose their identity, it is not the case of the respondent that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which all the three show cause notices dated 2-5-2000, 31-3-2001 and 10-8-2001 were issued were not different from those facts and grounds disclosed for issuance of show cause notice dated 5-3-2002. Only difference was in relation to the period. The allegation made in the three show cause notices were similar to those in show cause notice dated 5-3-2002. In the background of these facts, the contention that since investigation was still in progress and that only thereafter the notice dated 5-3-2002 in relation to the period from December, 1997 to September, 1999 was issued cannot be a justification for invoking extended period of limitation. It is pertinent to note that the show cause notice dated 2-5-2000 related to period October, 1999 to March, 2000. The show cause notice dated 21-3-2001 related to the period from April, 2000 to October, 2000 and show cause notice dated 10-8-2001 related to the period from November, 2000 to May, 2001. As already stated above, all the three show cause notices disclose the same facts and same grounds. One fail to understand if the show cause notice dated 5-3-2002 was also issued on the same ground but relating to the earlier period, what preve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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