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TMI Blog2012 (10) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... nd used in the manufacture of final products not on the same date of their issue but on subsequent dates, and although the factory was not equipped to manufacture final products using such large quantity of ingots, no objection was raised to the issue of large quantity of ingots right from the commencement of the factory in 1995. We, therefore, hold that the demand is barred by limitation and hence uphold the impugned order without recording any finding on the merits of the issue, and reject the appeal. The cross-objection is only in the nature of comments upon/reply to the Revenue's appeal and is hence dismissed. (Pronounced in open court on 21-2-2011) Sd/- (Dr. Chittaranjan Satapathy) Technical Member Sd/- (Jyoti Balasundaram) Vice-President 3. [Per : Chittaranjan Satapathy, Member (T)]. - I am unable to agree with the order recorded above for the reasons stated herein. The department has come in appeal against the impugned order-in-appeal passed by the lower appellate authority setting aside the demand of duty of Rs. 1,29,600/-, demand of interest and penalty of equal amount. While setting aside the order-in-original, the lower appellate authority has observed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the lower appellate authority that the impugned goods were cleared on 31-8-1997 before introduction and taking effect of the compounded levy scheme is contrary to the factual position borne out on record. Hence, his conclusion that the goods cleared on 31-8-1997 were eligible for duty exemption under Notification No. 67/95 is totally erroneous and unfounded. Secondly, his finding (extracted above) that "there is no need for any suppression because the actual clearance was on 31-8-1997", is also unfounded. In view of the foregoing, in my opinion, the erroneous order passed by the lower appellate authority, based on findings contrary to the facts on record, is clearly unsustainable. 6. The ld. Advocate, Shri R. Raghavan, has argued on behalf of the respondents that the demand raised by the department within the extended period of time limit is not valid as the department was aware about the practice of the respondents removing a quantity of Ingots for captive consumption on a day in excess of what can be consumed by them for manufacture of rolled products on a single day. As noted above in para 3, the respondents have not removed the impugned quantity of 216 MTs on 31-8-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hence, duty had to be paid thereon under Notification No. 50/97. 8. The exemption which was available to captive consumption under Notification No. 67/95, dated 16-3-1995 became inapplicable in respect of such Ingots cleared on or after 1-9-1997 vide clause 6(i) under column 3 of the Table appended to the said Notification as re-rolled products made therefrom had to pay duty under the compounded levy scheme in accordance with the provisions of Section 3A of the Central Excise Act, 1944. The Notification very clearly states that exemption is for goods specified in column 2 of the Table annexed to the Notification if used within the factory of production in or in relation to manufacture of final products specified in column 3 of the Table. The products specified under the above referred to clause 6(i) is excluded from the final products specified under column 3. In other words, captively used inputs go out of exemption if final goods pay duty under compounded levy scheme. The conclusion of the lower appellate authority that the exemption for captive consumption is available to the impugned Ingots is totally erroneous as such ingots cleared in the month of September, 1997 were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... msp;The feeble argument advanced on behalf of the respondents that they were in the habit of showing one time clearance of a higher quantity once during a month earlier and hence the departmental authorities must have had knowledge about such one time clearances does not advance the case of the respondents. Firstly, showing one time clearance without reference to the date of actual consumption was against the specific legal provision under Rule 9(2) of the Central Excise Rules, 1944. Secondly, since they were eligible for captive consumption earlier and no duty was required to be paid or assessed, their practice of showing one time clearance may not have come under the scrutiny of the departmental officers earlier. By no stretch of imagination it can be concluded therefrom that the respondents have made a disclosure of their wrong doing on 31-8-1997. They were working under the self removal procedure and the clearance figures indicated by them in the statutory records were to be truthfully made which they have failed to do. Apart from the fact that their practice of showing one time clearance was against the legal provision under Rule 9(2) as not corresponding to the date of actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Technical Member. Sd/- (Dr. Chittaranjan Satapathy) Technical Member Sd/- (Jyoti Balasundaram) Vice-President 14. [Per : M. Veeraiyan, Member (T)]. - The matter stands listed before me as, third member, in view of the difference of opinion recorded in Misc. Order No. 69/11, dated 15-2-2011. 15. The relevant facts have been recorded in detail in the Misc. Order, dated 15-2-2011. However, it would be appropriate to recapitulate certain facts in brief to consider the referred issue which are as follows :- (a) The respondents are manufacturers of 'MS Ingots' and they also manufacture goods like 'CTD Bars' using the said ingots. (b) Compounded Levy Scheme was introduced by Notification No. 30/97-C.E. (N.T.), dated 1-8-1997 in respect of the goods manufactured by the respondents and the said notification was effective from 1-9-1997. (c) The respondents have shown an Opening Stock of 291.3 MTs of 'MS Ingots' on 31-8-1997 and shown the same as having been issued for captive consumption in their RG-1 on 31-8-1997. They have issued Invoice No. 826, dated 31-8-1997 in respect of the said clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.100 MTs of 'MS Ingots' only on 1-9-1997, 2-9-1997 and 3-9-1997 i.e., after 31-8-1997. (c) In view of the above, the entry made in the RG-1 and the preparation of invoice, dated 31-8-1997 are merely by way of book adjustments. (d) With reference to the submission on behalf of the respondents that on earlier five occasions they have cleared more than 200 MTs on a single day, it was submitted that for the period upto 31-8-1997 the goods having been exempted under Notification No. 67/95-C.E., dated 16-3-1995, no attention was paid by the department as no duty was payable by the respondents. Regarding the invocation of extended time-limit relying on the decision of the Hon'ble Supreme Court in the case of Mathania Fabrics v. Commissioner of Central Excise, Jaipur reported in 2008 (221) E.L.T. 481 (S.C.), he submits that in view of admitted position of clearance of the goods after 31-8-1997 and manipulation of records by the assessees, extended period has been rightly invoked by the original authority. 18. Learned Advocate, countering the arguments of the learned SDR, made the following submissions :- (a) The al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 30/97-C.E. (N.T.), dated 1-8-1997. The dispute relates to 216.00 MTs of 'MS Ingots', which according to the respondents were removed on 31-8-2007, whereas according to the department, they were removed on subsequent dates. The limited issue to be considered is as to whether the demand raised against the assessee dated 22-3-2001 is barred by limitation or not. The decision on limitation undisputedly depends on both questions of fact and law. 22.1 In the present case, the respondents have made entries in the RG-1 for having cleared 291.3 MTs of 'MS Ingots' and issued invoices on the said date. 22.2. During the relevant period, Rule 53 and Rule 173G of the Central Excise Rules provided for maintenance of records on a day-to-day basis. The said Rules read as under :- Rule 53 : Daily stock account - (1) Every manufacturer shall maintain a stock account in such Form as the Commissioner may in any particular case or class of cases allow, and shall enter in such account daily - (a) description of goods, (b) opening balance, (c) quantity manufactured, (d) quantity deposited i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government to Parliament 18[or for the introduction in the House of the People of any Finance Bill or any Bill for the imposition or increase of any duty], the provisions of sub-rule (1) of rule 224, shall apply; 1[(v) * * * *]; (vi) where any correction, other than one relating to the date or the time of removal of the goods or to the description of the goods (including the variety of goods, the number and description of packages and the identification marks thereon), becomes necessary in any 2[invoice] before removal of the goods, such correction may be made by the assessee provided this is done neatly and over his dated signature in all copies of the 3[invoice] and; (vii) where the assessee, after he has debited the duty due on the goods in the account-current referred to in sub-rule (1), finds it necessary to cancel any 4[invoice], he shall send an intimation thereof in writing to the proper officer not later than the working day next following the day on which ..... 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