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TMI Blog2012 (9) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... PP films and the main raw material is plastic granules. In the process of manufacturing of BOPP, certain process loss occurs. The same has been declared by the respondent in 3CD Form for the years 1993-94, 1994-95 and 1995-96. On 6-12-1996 the departmental officers visited the factory of the respondent and found shortage of inputs in their factory and persuaded the respondent to pay duty on the shortages. Therefore on persuasion of the department, the respondent paid a sum of Rs. 3,67,500/-. After investigation was complete, the respondent filed a refund claim of Rs. 3,67,500/- paid by them during the investigation. During the pendency of the said refund claim, a show-cause notice were issued for demand of duty on the shortage of inputs fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of argument before the Commissioner (Appeals) he has given the entire evidence for the process loss and as per Encyclopaedia of Polymer Science, there is a process loss which may vary between 1-1.5% and in this case processing loss is 0.6% only. Therefore impugned orders are to be upheld. 6. Considered the submissions made by both sides and perused the impugned order. On perusal of the impugned order, I find that the Commissioner (Appeals) has considered the issue in detail on the basis of record produced by the respondent and thereafter has recorded the following observations. "I have carefully gone through the records of the case. The oral as well as written submissions of the appellants so also the law governing the issue u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properly investigated by the Revenue. There is no evidence to substantiate that these raw materials had been cleared clandestinely. On the contrary there appears force in Appellants' contention that there was processing loss during the manufacturing of final product. Further the appellants invited the attention towards photocopy of the relevant pages of Encyclopaedia of polymers Science and Engineering (Vol. 4). In support of their contention that polypropylene was susceptible to losses, degradation when subjected to heating. Thus cent percent recovery of Polypropylene was not possible in making P.P. Films therefrom. In any case the percentage loss of raw material consumption has been of the order of 0.415%, 0.223% and 1.057% in the year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliance upon CEGAT's decision in the case of Bharat Radiators Ltd. v. Commissioner of C.Ex., Mumbai-I - 1999 (112) E.L.T. 918 (Tribunal), Commissioner of Central Excise, Chandigarh-I Atul Fasteners Ltd. - 2002 (150) E.L.T. 632 (Tri.-Del.) and Chennai Engineering Works v. Commissioner of Central Excise, Allahabad - 2002 (150) E.L.T. 1161 (Tri.-Del.). In view of the above submissions of the Appellant it is conceded that the Appellants could very well substantiate their claims that the alleged shortage of inputs was on account of process loss. Hence, the demand of credit involved in such inputs found in shortage is not sustainable. As such the imposition of penalty as well as recovery of interest deserves to be quashed and set aside." 7. On ..... X X X X Extracts X X X X X X X X Extracts X X X X
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