TMI Blog2014 (9) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... % and 34.8% which is not possible. - matter remanded back. The Commissioner being satisfied with the respondent’s explanation has dropped the demand. However, the Department s contention as explained in para 6.3 of the review order is that in the day-to-day account of the consumption of packing bags was being maintained by the respondent and in it they were mentioning the closing balance of bags after deducting the number of bags issued for packing and number of bags gone waste from the sum total of the opening balance and the bags purchased and that there is clear manipulation in the account of the packing bags and as such their plea regarding 6496 bags becoming waste is not acceptable. It is seen that the Commissioner in his findings on this issue has not discussed the evidence on record in this regard as discussed in para 6.3 of the review order and he has come to an abrupt finding that the Department s allegation regarding clandestine clearance of 715.016 M.T. of CPC during period from May 1992 to June 1993 based on the consumption of packing bags is not acceptable. Therefore, this decision of the Commissioner also has to be set aside and the matter has to be remanded to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent are manufacturers of Calcined Petroleum Coke (CPC) falling under Tariff item heading 2713.12 of the Tariff. The raw material for the CPC is Raw Petroleum Coke (RPC) falling under Tariff sub-heading 2713.11. The manufacturing unit of the respondent was visited by the Jurisdictional Central Excise officers on 13/10/93 in course of which several enquiries were made. After indepth investigations the following discrepancies and irregularities were detected :- (1) During the period from June, 1991 to October 1993 there was difference between the quantities mentioned in the invoices and the quantity mentioned in the corresponding weighment slips. The weighment slips showed higher quantity of the goods while the invoices were issued for lower quantity. From this it appeared that the respondent while paying duty on the lower quantity, had cleared higher quantity and, as such, there is clearance of certain quantity of CPC without payment of duty. From this, it appeared 27.527 M.T. of CPC had been cleared clandestinely without payment of duty during the period from June 1991 to October 1993 ; (2) CPC is cleared in 50 kg. packs and sometimes in 100 kg. packs. For 50 kg. packs ei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e RPC at the applicable rate on the date of clearance. The differential duty on this amount worked out to ₹ 1,16,659/- 1.2 In view of the above investigation, a show cause notice dated 20th February 1999 was issued to the respondent for demand of duty amounting to ₹ 21,28,868/- under proviso to Section 11A (1) of the Central Excise Act, 1944 and for imposition of penalty on the respondent company under Rule 173Q (1) (d) of the Central Excise Rules, 1944 and also for imposition of penalty under Rule 209A of the Central Excise Rules, 1944 on Shri Amitav Chaudhary, Director and Shri G.K. Rai, General Manager of the respondent company. 1.3 The show cause notice was adjudicated by the Commissioner, Central Excise, Allahabad vide order-in-original dated 31/10/2000 by which the Commissioner confirmed the entire demand in toto and beside this, while imposed penalty of ₹ 20,00,000/- on the respondent under Rule 173Q (1) penalty of ₹ 5,00,000/- each under Rule 209A was imposed on Shri Amitav Chaudhary and Shri G.K. Rai. 1.4 The respondent filed appeals to the Tribunal against the above order of the Commissioner and the Tribunal vide final order dated 06/12/07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner s order dropping the penal proceedings under Rule 209A of Central Excise Rules, 1944 on Shri Amitav Chaudhary, Director and Shri G.K. Rai, General Manager have also been challenged. However, the Commissioners order dropping the duty demand on 36 M.T. of CPC based on the GRs has not been challenged and, as such, has been accepted. 2. Heard both the sides. 3. Shri Ranjan Khanna, learned DR, assailed the impugned order by reiterating the grounds of appeal in the Revenue s appeal with regard to the duty demand on 27.527 M.T. of CPC based on the difference between the invoice weight and the weight recorded in the weighment slips, he pleaded that the Commissioner s findings that the difference could be on account of weight of the empty bags and that the difference is to the tune of 1% to 2% is incorrect, that the difference between the weight as mentioned in the invoices, and as mentioned in the corresponding weighment slips is to the extent of 4% to 5% which cannot be on account of weight of the empty bags. He also pointed out that during the period from June 1991 to October 1993 mainly the plastic bags has been used and very small quantity of jute bags had been used, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Rule 9A (3A) of the Central Excise Rules. With regard to the imposition of penalty under Rule 209A of Central Excise Rules, 1944, on Shri G.K. Rai and Shri Amitav Chaudhary, Shri Khanna pleaded that both these persons are involved in evasion of duty and hence penalty should have been imposed on them under Rule 209A. He pleaded that both these persons not only had full knowledge, but were also directly involved in evasion of duty. 4. Shri Bipin Garg, Advocate, the learned Counsel for the respondent, defended the impugned order by reiterating the findings of the Commissioner. 4.1 With regard to the duty demand of ₹ 27.527 M.T. of CPC based on the difference between the quantity mentioned in the invoices and the quantity mentioned in the respective weighment slips, he pleaded that the difference could be on account of weight of the empty bags. He also pleaded that there is no evidence of any amount being received by the respondent from their customers over and above the invoice price and accordingly merely on the basis of difference between the invoice weight and weight mentioned in the weighment slips the duty demand on the difference cannot be confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the demand of duty on alleged clandestine clearances of 27.527 M.T. of the CPC. This demand is based on the difference between the weight of the goods mentioned in the invoices and the weight shown in the corresponding weighment slips. The Commissioners finding is that the difference is 1% to 2% and the same may be on account of weight of the packing material and also that there is no evidence of the appellant having received any amount over and above in the invoice amount in cash. The Departments contention is that the average difference is not 1% to 2% but is much higher 4% to 5% since during the period of dispute i.e. during period from May 1992 to December 1992, the quantity of jute bags used were negligible - 2450 bags as against 35203 plastic bags used, there is no possibility of the weight increase on account of absorption of moisture by the jute bags which are hydroscopic in nature. As mentioned in para 6.2.2 of the Boards review order in some cases, the difference works out to 17.2%, 54% and 34.8% which is not possible. It is seen that the points raised in para 6.2.2 of the Departments review order have not been examined by the Commissioner. Therefore, in my view on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 M.T. of RPC as such. In respect of this quantity of RPC, the respondent had taken Modvat credit and the same had been cleared as such. According to the Revenue, in terms of the provisions of Rule 9A (3A) of the Central Excise Rules, 1944, which were in force at the material time, in such cases of clearance of Modvat credit availed input as such, an amounts equal to the duty payable on the input at the rate of duty inforce on the date of clearance was required to be paid subject to the minimum of the credit originally taken. However, I find that there was similar provision in Rule 57F (1) (ii) of the Central Excise Rules, 1944 and interpreting the provisions of this Rule Larger Bench of the Tribunal in the case of CCE, Vadodara vs. Asia Brown Boveri Ltd. (supra) has held when modvated inputs are cleared as such, only an amount equal to the Modvat credit originally taken was required to be paid. In view of this, the Commissioners finding on this point is correct. 9. As regards the question of penalty under Rule 209A of Central Excise Rules, 1944 on Shri Amitav Chaudhary, Director and Shri G.K. Rai, General Manager of the respondent company, while the Commissioner has dropped th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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