9911796707
TMI Blog2014 (3) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacture of their final product. Accordingly, proceedings were initiated against them resulting in confirmation of demand of duty of Rs.5,69,46,336/-, along with confirmation of interest and imposition of penalty. The impugned order of Commissioner is appealed against by way of filing of an appeal along with stay petition. 3. Arguing on the stay petition, learned advocate Shri Alok Barthwal appearing for the appellant, drew our attention to the finding of the adjudicating authority and pleaded that entire case of the Revenue is based upon theoretical inputs/output ratio and on the opinion of NIT Raipur. The adjudicating authority on the above basis has come to the conclusion that the appellant has shown excess receipt of their raw materials and excess utilization of the same in the manufacture of their final product. He submits that apart from the opinion of NIT Raipur, there is virtually no other evidence on record either as regards non-receipt of their inputs or as regards the clearance of the same, after availment of credit. The Revenue cannot rely upon such opinion, without their being any evidence to that effect. As against the above, they have also produced a Chartered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within about 8 weeks from today and report compliance on.................. Subject to the deposit of above amount, the pre-deposit of balance amount of duty and entire amount of penalty is waived and its recovery stayed during the pendency of the appeals. 7. Stay petitions are disposed of in the above terms. (Pronounced in the open court on) Per: Manmohan Singh: 8. I observe that in the draft order recorded by the learned Member (Judicial), it has ordered deposit of Rs.30 lakhs against the demand of Cenvat credit of Rs.5.69 crores and a penalty of equal amount of Rs.5.69 crores in addition to interest amount. I am of the opinion that once having come to the conclusion that it is not a fit case for complete waiver of the amount sought to be recovered by the Revenue, the quantum of pre-deposit has to be reasonable enough so as to ensure that the Appellant is not denied his right to appeal, at the same time safeguarding the interest of Revenue. I do not agree with the findings of learned Member (Judicial) and will like to record separate order. 9. Ongoing through the report of the Commissioner on usage of the input materials particularly pig iron and the analysis thereof by the N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 5 of the impugned order may be referred which is based on NIT report. In the regard it is also worthwhile to refer to Para 7 of the impugned order: 5. The NIT, Raipur (Institute of National Importance) was requested to comment up on the scope of any loss other than that considered in analysis made by the Department. The NIT clearly replied in negative and said all possible losses had been considered in the calculation made by the Department. Following benefit of doubts had been given in favour of the Noticee while making the above calculation for the sake of clarity of issue:- (i) It was assumed that they used materials having carbon on lower side in the composition range, to produce ingots had carbon on higher side in the range. For example their supplier might have given Pig iron which Carbon ranging from 3.6% to 4.2%, but it had been treated that they might have received all the pig iron consignments containing only 3.6% C, similarly they can very well supply MS ingots containing just 0.15% Carbon under IS Specification, but it has been treated that the Noticee might have produced ingots of all heats with maximum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achieved with minimum addition of expensive materials like Ferro-Alloys or coke. In no circumstances excess composition in the heat was allowed as it would delay the production, raise the cost of production and also cause rejection by the customer. 12. It is also seen from Para 8.3 that the Appellants were during the course of audit specifically asked to explain the reasons for manufacturing MS ingots in their factory during the years 2006-2007 to December 2010 at a cost that was higher than the cost of MS ingots available in and purchased by them from the open market. But they did not respond to this query. It further emerges that once the value of the materials allegedly not used in the manufacturing process was taken out, their cost structure came in line with the material available in the market. I find that the Revenue has adduced enough practical examples (Para 17.1) to show that such a high quantity (17% of pig iron) could not have been used as other units have consumed maximum 6% of pig iron. These are the aspect that need to be gone into at the time of final hearing but cannot be ignored for determining the quantum of pre-deposit required at this stage. Every case has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumption of pig iron has been shown in excess than it is actually required. Utility of carbon in manufacture of MS ingots is only 0.25% but from the analysis of consumption of carbon, it is observed that per charge of carbon comes to 1.0% to 2.0%. With this carbon content, there can be no manufacturer of MS Steel. With this carbon content, only high carbon product can be manufactured. This factor indicate that actually required carbon for manufacture of M.S.Ingots is 0.25 but overall consumption of carbon shows leading a situation that excess receipt and abnormal consumption of raw material (pig iron) is shown which only indicates that some documents have been received without accompaniment of material availing large amount of Cenvat credit. 18. From the above discussion, I am of considered opinion that ends of justice shall be met if appellants are ordered to make a partial deposit of Rs.1.25 crores within specified period of eight weeks. Compliance shall be noted on -------------------. Difference of Opinion Whether following previous decision of CESTAT in Aditi Ispat partial waiver of pre-deposit is to be ordered as held by Member (Judicial) with a direction to deposit Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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