TMI Blog2011 (7) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... e same financial year, according to the Department, the credit to the tune of about Rs. 1.93 crores was not reversed, as after reversal, the same was taken again - While this point can be examined only at the time of regular hearing, after carefully considering the claims and counter claims of both the sides and examining the records, at this stage, it can be said that on this point, this is not a case for total waiver - Decided in favor of the assessee by way of direction to deposit Rs. 50 Lakhs - E/2325-2326/2009 - 747-748/2011-EX(PB) - Dated:- 25-7-2011 - Justice R.M.S. Khandeparkar, Shri Rakesh Kumar, JJ. REPRESENTED BY : Shri A.R. Madhav Rao, Advocate, for the Appellant. Shri Sunil Kumar, DR, for the Respondent. [Order per : Rakesh Kumar, Member (T)]. The facts giving rise to this appeal and stay application are, in brief, are under :- 1.1 The Appellant Company is engaged in the manufacture of colour picture tubes chargeable to central excise duty. They avail cenvat credit of duty paid on inputs and capital goods used in or in relation to manufacture of their final products. Shri Bharat Gupta is the Divisional Manager (Stores) of the Appellant Company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the Appellant Company under Rule 13(2) of the Cenvat Credit Rules, 2001/2002 read with Section 11AC of the Central Excise Act, 1944; (c) recovery of duty amounting to Rs. 4,45,85,431/- under proviso to Section 11(1) of Central Excise Act, 1944 on the goods alleged to have been cleared clandestinely during 2001-2002, along with interest on this duty under Section 11AB ibid and imposition of penalty on the Appellant on this count under Section 11AC ibid; and (d) imposition of penalty on Shri Bharat Gupta, Divisional Manager (Stores) of the Appellant Company under Rule 26 of the Central Excise Rules, 2001. 1.4 The above show cause notice was adjudicated by the Commissioner of Central Excise, Ghaziabad vide Order-in-Original No. 04/Commr./G2B/06 dated 27-10-2006 by which - (a) the duty and Cenvat credit demands as made against the Appellant Company in the show cause notice were confirmed along with interest; (b) total penalty of Rs. 7,34,98,331/- (Rs. 4,45,85,431 + Rs. 2,89,12,900/-) was imposed on the Appellant Company under Rule 25 of the Central Excise Rules, 2001 and Rule 13(2) of the Cenvat Credit Rules, 2001 read with Section 11AC of Central Excise Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .11 crores determined by the Auditors excludes waste of Rs. 22.84 crores and if this is added, the total raw material consumption would be Rs. 390.95 crores which more or less compares with the figure of Rs. 387.32 crores in Profit Loss Account, that the duty demand of Rs. 4,45,85,431/- based on the alleged discrepancy is raw material/input consumption is, therefore, without any basis, that out of alleged excess cenvat credit of about Rs. 2.89 crores, while credit of Rs. 2.04 crores is that which had initially been taken in respect of certain inputs received but was reversed subsequently, as either the same was found to have been wrongly taken or the inputs having been found defective and unusable were scrapped and insurance was claimed, that the credit of Rs. 0.6912 crores was in respect of duty paid finished goods returned to the factory for repairs, reconditioning etc. under Rule 16 of the Central Excise Rules, 2001 and this credit initially taken under this Rule, was reversed when the finished goods were removed after repairs, etc., that letter dated 22-10-2007 of Superintendent Range-IV, Division-IV, Ghaziabad confirmed the reversal of credit of Rs. 2.04 crores, and this let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the quantity and value of finished products, declared by the Appellant in their records and comparing the same with the value of the raw material consumption shown in the profit loss account of the Appellant for the same financial year. According to the Appellant, the cost accountant have not considered the wastage of the raw materials, and if the waste of Rs. 22.84 crores is added to the raw material consumption, cost of Rs. 368.11 crores determined by the Auditors and which does not include waste, there would not be any discrepancy. On going through the Commissioner s findings in the impugned order on this point and also through the records of the case, we find that there is neither any allegation nor any evidence of unaccounted purchase of raw materials/inputs. There is also no evidence of clandestine removal of the finished goods. In this regard, the entire case against the Appellant is based on estimated consumption of raw materials/inputs used in the manufacture of the finished products declared in the books of accounts. According to the Department, in view of Cost Accountant s report, the actual consumption of inputs/raw materials used in the manufacture of the finished ..... X X X X Extracts X X X X X X X X Extracts X X X X
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