TMI Blog2015 (5) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... a Industries and as such the same cannot be said to have been cleared to M/s Shivam Udyog without payment of duty. In view of this, the duty demand of ₹ 9,398/- and confiscation of these goods has also to be set aside. Cenvat Credit - If the plastic granules had been cleared to job workers under job work challans on 08.09.2002 there is no explanation as to why the Authorized Signatory of the appellants was not aware about the same. Therefore, we hold that the Commissioner (Appeals) has correctly held that the plea of sending the plastic granules to job workers under job work challan are only an afterthought. However, we find that the amount of ₹ 2,90,613/- from M/s Annapurna Industries and the amount of ₹ 4,46,426/- demanded from M/s Shivam Udyog has been determined by adopting some value of the granules and calculating the duty on the same at rate of 16%, while in our view only the cenvat credit originally taken in respect of Granules would be payable which according to the appellant would be a much lesser amount. The cenvat credit attributable to 4125 KG of plastic Granules found short in the premises of M/s Annapurna Industries and 15,375 KG of Plastic Granu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Cenvat Credit Rules and that the amount payable in the case of M/s Annapurna Industries was ₹ 2,90,613/- and the amount payable by M/s. Shivam Udyog of ₹ 4,46,426/-. At the time of stock taking of plastic granules, Shri D P Singh, the Authorized Representative of both the units was present and on being asked, he could not give any explanation whatsoever, and as such accepted the shortage. 1.1 After issued a show cause notice, the matter was adjudicated by the Joint Commissioner vide order-in-original dated 31.03.2004 by which he confirmed the demand of ₹ 2,90,613/- against M/s Annapurna Industries and demand of ₹ 4,46,426/- against M/s Shivam Udyog under Rule 12 of the Cenvat Credit Rules, 2002 along with interest thereon under section 11AB and beside this, penalties of equal amount on them under Rule 13(2) of Cenvat Credit Rules, 2002, read with section 11AC of Central Excise Act, 1944. By the same order, the Joint Commissioner also confirmed duty demand of ₹ 9,398/- against M/s Annapurna Industries along with interest thereon under section 11AB in respect of the finished products held to have been removed by them and which have been found p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d caps found were not in fully finished condition, that as regards alleged excess quantity of 780 KG of Plastic Scrap, the same was meant for recycling and for this reason only, the same had not entered in the RG-1 Register, that in view of this the confiscation of 780 KG of scrap and confiscation of the plastic containers/ caps is not sustainable, that as regards the alleged shortage of 4125 KG of Plastic Granules in the factory of M/s Annapurna Industries and alleged shortage of 15,375 KG of Plastic Granlues in the factory of M/s Shivam Udyog, as explained by the appellant in their reply to the Show Cause Notice, there was no shortage, as this quantity of plastic granules had been sent to various other manufacturers including M/s JJ Packagerr Unit II for manufacture of plastic caps and handles on job work basis, that that though at the time of officers visit to the factory, the Authorized Representative present at that time, could not produce the job work challans, subsequently at the time of reply to the Show Cause Notice, the job work challans along with job work register had been produced, that the plastic granules sent to the job workers had been processed by the respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorized representative was not aware of sending of the consignments of plastic granules to various job workers. He, therefore, pleaded that the cenvat credit demand in respect of the quantity of plastic granules found short has been correctly upheld by the Commissioner (Appeals). He accordingly pleaded that there is no infirmity in the impugned order. 4. We have considered the submissions from both the sides and perused the records. Coming first to the question of non-accountal of 780 KG of plastic scrap found in the premises of M/s Annapurna Industries, there is no dispute that the same was not accounted for in the RG-1 Register. However, we are of the view that the appellants plea that the same being intermediate product was meant for recycling and was exempted from duty under notification no. 67/95 CE and for this reason, the same was not accounted for in the RG-1 Register is acceptable. Accordingly, we hold that the confiscation of 780 KG of Plastic Scrap under Rule 25(1) of Central Excise Rule 2002 and imposition of penalty on M/s Annapurna Industries on that account is not sustainable and has to be set aside. 5. As regards, the alleged removal of plastic containers b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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