TMI Blog2015 (11) TMI 1476X X X X Extracts X X X X X X X X Extracts X X X X ..... transportation cost involved, besides the cost of loading at the Thermal Power Plants and also the cost of storage in the appellant company's factory which may involve constant spraying of water. In absence of data regarding transportation cost, loading cost and unloading and storage cost, the plea that fly ash is absolutely free and therefore there would be no incentive not to use it to the extent permitted, cannot be examined. Undue hardship to the assessee would exist only when on the basis of the evidence on record there is absolutely no case of the duty evasion/non-payment of duty against the assessee, while in this case this is not so. Therefore, on the basis of the twin consideration of undue hardship and safeguarding the interest of Revenue, this is not the case which would merit total waiver from compliance with the provision of Section 35F. - Partial stay granted. - Excise Misc. Application Nos. 57861, 59565 and 61295 of 2013 in Appeal Nos. 2206-2208 and 2304-2306 of 2012 - Misc. Order No. 51180-51182/2015 - Dated:- 6-4-2015 - Shri Rakesh Kumar, Member (Technical) And Shri S.K. Mohanty, Member (Judicial) For the Petitioner : Shri V. Lakshmi Kumaran, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording to the statements of Assistant Engineers of Kota Thermal Power Plant, the appellant company did not lift any fly ash from the power plant. In course of investigation, the Investigating officers conducted inquiry with three transporters, who as per the records of the appellant company, had been engaged by them for transportation of the fly ash to their factory at Bhilwara from Kota and Suratgarh and those transporters stated that they have never transported the fly ash to the appellants factory. The statement of 93 truck owners whose trucks were being used by the transporters were also recorded wherein they stated that no fly ash had been transported. It is on this basis that after issue of show cause notice, the Commissioner by the impugned order-in-original dated 30th March, 2012 denied the exemption under Notification No. 6/02-CE to the appellant company and confirmed the duty demand of ₹ 11,02,12,141/- against the appellant company in respect of clearances of AC Pressure Pipes during the period from December 2003 to March 2006 alongwith interest thereon under Section 11AB and beside this, imposed penalty of equal amount on them under Section 11AC. The Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of financial hardship which has been pleaded by the appellant before the Honble High Court, the Tribunal vide order dated 30th June, 2014 directed the appellant alongwith the Department to seek a clarification in this regard from the High Court. The applications in this regard were filed by the appellant before Hon ble Rajasthan High Court and on 6th January 2015 Hon ble High Court passed the following order :- By an order dated 30/3/12, the Commissioner of Central Excise, Jaipur-II demanded duty of excise of ₹ 11,02,12,141/- with interest and a penalty of ₹ 11,02,12,141/-. By way of filing an appeal as per provisions of Section 35-B (1) (a) of the Central Excise Act, 1944 (hereinafter referred to as the Act of 1944) the petitioner assailed validity of the order dated 30/03/2012. Application was also preferred seeking stay of the demand and waiver of deposit of duty to the tune of ₹ 11,02,12,141/-. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) by its order dated 4/12.2.2013 disposed of the stay application with a direction to the petitioner to pay 50% of the confirmed duty within a period of 12 weeks as pre-condition for waiver of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order of the High Court, the matter of waiver of requirement of pre-deposit by the appellant was heard afresh. 2. Heard both the sides in respect of stay application. 3. Shri V. Lakshmi Kumaran, Advocate, the learned Counsel for the appellant, pleaded that the appellant in accordance with the exemption Notification No. 6/02-CE dated 1/3/02 (Sl. No. 158) had procured fly ash from Kota Thermal Power Statino and Suratgarh Thermal Power Plant and had used the fly ash to the extent of more than 25% in the manufacture of AC Pressure Pipes and as per the condition of the exemption notification, the appellant had maintained record of the receipt and use of the fly ash in the prescribed format and had also been regularly filing the returns regarding the receipt and use of the fly ash, that the appellant had absolutely no incentive for not using the fly ash to the extent of 25% or more, as if the fly ash, which is free, is not used, the appellant would be required to use the much costlier input cement, that for transportation of fly ash from the power plants, the services of three transport companies M/s Kaka Roadlines, M/s Robin Roadways and M/s Singhvi Transport had been used, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard weight chart and computation of percentage of fly ash worked out by the Department in relation to pipes manufactured using Magnani Technology is incorrect, since the authorities have arrived at the standard weight of these pipes considering their length as 5 meters whereas actual the length of these pipes was 4 meters, as evidenced by the invoices raised by the appellant for clearances of these pipes, that consumption of the cement in the balance sheet for 2003-2004 and 2004-205 matches with the production records of the appellant company, that the reason for variation in consumption of cement during 2005-2006 is that out of total consumption of 55965.554 M.T. of cement shown during 2005-2006, 19882.064 M.T. of cement was consumed in Ahmedabad unit of the appellant, which started commercial production in 2005-2006 only and the remaining quantity of cement was used in the Bhilwara Unit to which this dispute pertains, that no adverse conclusion can be drawn from the incident of violence at the time of search of the appellant factory, as the search has been conducted through out the night and the next day, without allowing the workers to leave the factory premises even after their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ota Thermal Power Plant and Suratgarh Thermal Power Plant, that the statements of Shri Mahmood Ahmed, Assistant Engineer (ash handling and maintenance) and of Shri Vinod Kumar Agarwal, Assistant Engineer (CA-II) of the Kota Thermal Power Plant had been recorded, that it is clear from the statements of these two officials of Kota Thermal Power Plant, that they were responsible for the maintenance of ash handling plant and the ash dyke also, which contains slurry, that it is absolutely wrong to say that these two Assistant Engineers had no information about the lifting of ash from the ash dyke (ash pond), that both these persons in their respective statements have stated that during the period of dispute, no fly ash was lifted by the appellant company, that the appellant company had engaged three transporters for transport of fly ash from Kota Thermal Power Plant and Suratgarh Thermal Power Plant, that proprietors of these three companies in their respective statements have denied having transported the fly ash to the factory premises of the appellant company, that beside this, statements of 93 truck owners had also been recorded and each of them has denied having transported any fly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered the submissions from both the sides and perused the records. 6. The appellant are manufacturers of AC Pressure Pipes. The raw material for Asbestos Cement Pressure Pipes is Asbestos fibre and cement. However, as per ISI specification ISI 592-2003 for Asbestos Cement Pressure Pipes and Joints, fly ash can be used upto 40% by weight to replace the Portland cement. Notification No. 6/02-CE dated 01/3/02 (Sl. No. 158) exempts the products falling under Chapter 68 of the Central Excise Tariff made by using not less than 25% by weight of fly ash or phosphor gypsum or both subject to condition that the assessee maintain a record of receipt and use of the fly ash in the format prescribed by the Commissioner and also file a monthly statement to the Jurisdictional Central Excise authorities regarding receipt and consumption of the fly ash. There is no dispute that the appellant were not availing of this exemption in respect of the AC Pressure Pipes made without the use of fly ash. The dispute is in respect of manufacture and clearance of AC Pressure Pipes during the period from December 2003 to March 2006, which according to the appellant, had been made by using fly ash and which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t company have been found to be fake and as per the records of Shri Nath Computerised Dharamkanta, the weighment slips of the same numbers had been issued in the name of totally different parties ; (4) Statement of Shri Lila Ram Sabnani, owner of M/s Shri Nath Computerised Dharamkanta wherein after perusing and comparing the weighment slips submitted by the appellant company with daily weighment sheet of his Dharamkanta, he stated that the trucks covered by the computerised weighment slips submitted by the appellant were not weighed on his Dharamkanta since the same were not mentioned in daily weighment detail sheets ; (5) Statement of 93 truck owners in whose trucks the transportation of fly ash had been shown by the appellant company from Kota/Suratgarh Thermal Power Plant to their factory premises at Bhilwara. In all these statements, the 93 truck owners have stated that they had not transported any fly ash for the appellant company ; (6) Statements of Shri Paras Mal Mehta, Proprietor of M/s Robin Roadways, Bhilwara, Shri Darpan Jain, Proprietor of M/s Kaka Roadlines, Kota and statement dated 14/5/07 of Shri Jai Kumar Singhvi, Proprietor of M/s Singhvi Transpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has been refused, no reliance can be placed on their statements. Other pleas of the appellants are that (1) calculation of percentage of fly ash in AC Pressure Pipes during 2005-2006 is wrong as the cement used in Ahmedabad plant of the appellant company has also been treated as used in the Bhilwara plant; (2) discrepancy in Dharamkanta slips is only in respect of 197 slips for period from November 2005 to March 2006 and (3) FIR lodged by the Department against the employee of the appellant company of having obstructed the search has been dismissed by the Judicial Magistrate. 9. We find that Shri Parasmal Mehta of M/s Robin Roadways, Shri Darpan Jain of M/s Kaka Roadlines and Shri Jai Kumar Singhvi, Proprietor of M/s Sanghvi Transport in their respective statements had clearly stated that no fly ash had been transported by the trucks of their transport company for the appellant company. Though Shri Parasmal Mehta and Shri Darshan Jain have subsequently retracted their statements, the fact remains that their statements are corroborated by the statements of owners of the truck (93 nos.) who in their respective statement have stated their trucks have not been used for transporta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while cement is much costlier, there was absolutely no incentive for the appellant company to use cement instead of fly ash. But fly ash is free only for those users who are located in close vicinity of the source of fly ash. For the appellant company, whose factory located at Bhilwara is at considerable distance of about 200 k.m. from the Kota and Suratgarh Thermal Power Plants, there would be transportation cost involved, besides the cost of loading at the Thermal Power Plants and also the cost of storage in the appellant companys factory which may involve constant spraying of water. In absence of data regarding transportation cost, loading cost and unloading and storage cost, the plea that fly ash is absolutely free and therefore there would be no incentive not to use it to the extent permitted, cannot be examined. 13. In view of the above discussion, it cannot be said that the Departments case against the appellant is absolutely without any basis and that the appellant have very strong prima facie case in their favour. Under Section 35F of the Central Excise Act, 1944 waiver from the requirement of pre-deposit is to be granted on the basis of twin considerations whether ..... X X X X Extracts X X X X X X X X Extracts X X X X
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