TMI Blog2015 (5) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... nent, it cannot be presumed that the appellant have inflated the consumption of raw material and have cleared the alleged excess consumption without reversal of the credit. More so, when the difference between the ascertained weight of the component and the weight indicated by the companies' officials is less than 1.5 per cent of the total raw material purchased during fast five years. Moreover, we also find that though the impugned order mentions that weight of the component is recorded in the RT -12 Returns, on going through the returns, we find that it is not so as RT -12 returns mention only the number of the different types of the components manufactured and cleared and not their weight. The duty demand of ₹ 25,14,220/- is therefore, not sustainable and has to be set aside along with penalty. Duty demand of ₹ 1,74,015/- in respect of the alleged shortage of plastic granules valued at ₹ 10.87 lakh, it is seen that this shortage has been determined on 4/2/2003 by comparing the stock of the granules actually found with the stock of granules as maintained on the computer. But it is seen that at that time, the record of the raw material maintained in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this information was furnished. Officers, on this basis, estimated the consumption of the raw material - plastic granules, used in the manufacture of plastics auto parts. Besides this, the officers also determined the weight of each component. On the basis of comparison between the weight of different automobile parts determined on the basis of actual availment and the weight of those components in terms of information furnished by the appellant, the officers were of the view that the consumption of raw material have been inflated and the extra raw material has been removed clandestinely without reversal of the CENVAT Credit. 1.3. It was also found that the appellant were using the moulds and dies supplied by M/s. Maruti Udyog Limited for manufacture of the plastic components for them. The moulds and dies had initially been imported by MUL under EPCG Scheme without payment of duty. However, subsequently, since MUL could not meet the export obligation, they paid the basic custom duty as well as additional customs duty on the imported moulds and dies. The appellant had earlier amortized only the value of the moulds and dies, but subsequently when MUL paid the basic customs duty an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he vendors of MUL, and who had also received the moulds and dies imported by MUL under EPCG Scheme, has held that while the differential duty on the account of amortization of the quantum of basic custom duty paid by MUL on the moulds and dies would be payable, no penalty would be imposable, as there was no intention on the part of the vendors to evade the duty; that the ratio of this judgment of the tribunal is squarely applicable to the facts of this case; that duty demand of ₹ 25,14,220/- which is based on the weight of difference between the weight of components indicated by the appellant's employees in response to the officers' enquiry and the actual weight, that merely on this basis, the department cannot presume that the consumption of raw material was inflated; that though the impugned order refers to the weight of the components being mentioned in the RT -12 Returns, RT -12 Returns does not mention the weight of the component and simply mentions the number; that just because some employee of the appellant company indicated the weight of different components, that information cannot be treated as 100 per cent correct and on that basis, the appellant cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds and dies, the duty demand is not disputed by the appellant, hence, the same is confirmed along with interest. However, as regards, the penalty for the short payment, the Tribunal in the case of Mark Auto Industries Ltd. Vs. Delhi-Ill and Rasandhik Engineering Industries Vs. CC Delhi-III final order no. A/56358-56359/2013-EX [DB] dated 1/5/2013 where the identical issue and identical facts are involved has held that penalty would not be imposable on the vendors. Following this judgment of the Tribunal, we hold that the penalty of ₹ 3,07,354/-imposed on the appellant is not sustainable. Thus, while the duty demand of Rs, 3,07,354/- along with interest is upheld, the penalty of same amount is set aside. 7. As regards the duty demand of ₹ 25,14,220/- it is based on the allegation that the appellant have inflated their raw material consumption/plastic granules and the excess consumption of CENVAT Credit availed plastic granules has actually been cleared without reversal of the credit. This allegation is based on the weight of the various plastic components as determined by the actual availment and the weight of the same component as intimated by the officials of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd. Vs. Union of India reported in 2008 (228) ELT 31 DEL, the penalty is reduced to 25%. 10. As regards the confiscation of unaccounted finished goods, since the same is not disputed, it is upheld. The redemption fine, however, is reduced to rupees one lakh. However, the penalty of ₹ 50,000/- imposed on the appellant company for non- accountal of the finished goods and raw material, is set aside. 11. In view of the above discussion, the following order is passed: 11.1. While the duty demand of ₹ 3,07,354/- is upheld along with interest and penalty of the same amount is set aside. 11.2. Duty demand of ₹ 25,14,220/- is set aside along with interest and penalty of equal amount. 11.3. The duty demand of ₹ 1,74,015/- in respect of the alleged shortage of CENVAT Credit availed plastic granules is set aside along with penalty. 11.4. The duty demand of ₹ 2,17,255/- in respect of the shortage of finished products is upheld along with interest and penalty under section 11AC is reduced to 25%. 11.5 While the confiscation of excess stock of finished goods is upheld, the redemption fine of ₹ 2,50,000/- is reduced to ₹ 1 lakh. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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