TMI Blog2007 (2) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... nd blooms, detected on 1-2-1997 when the Central Excise Officers visited the factory of M/s. Hariyana Metals Ltd. (hereinafter referred to as 'Assessee No. 1') together with penalty of equal amount, confirmed duty demand of Rs. 3,64,284/- on unaccounted production of 46.495 MT + 135.365 MT of channels, together with interest and penalty of equal amount, confirmed demand of Rs. 1,27,801/- on shortage of 69.564 MT of finished goods together with equal penalty, imposed penalty of Rs. 10 lakhs for contravention of Rule 57A read with Rule 57G of the erstwhile Central Excise Rules, 1944 for misuse of Modvat credit and also imposed a penalty of Rs. 2,50,000/- upon assessee No. 1, and confirmed duty demand of Rs. 29,63,822/- on unaccounted producti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1 has a weigh bridge in its own premises and actual weighment of raw material was carried out before entering the stock of inputs under RG 23A Part-I and if there was any weight difference, Assessee No. 1 should have reflected the same in the RG 23A Part-I and in formed the department accordingly and taken Modvat credit of a lesser amount, which was not done As regards the second explanation, (÷) and (-) variation in weight due to adopting the sectional weight method would neutralize each other over a period of time and therefore there would be no tangible difference. As regards cutting and burning losses, such losses have no bearing on the stock of inputs and are only relevant for arriving at quantity of finished products and therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ISCO and were also filing requisite declaration in proforma Annexure-II under Rule 173C of the Central Excise Rules. They were also availing benefit of Modvat credit for which purpose, necessary declarations under Rule 57G of the Central Excise Rules were being filed. They were maintaining prescribed statutory records, such as R.G. 1 Register, Form 4 Register etc. and filing periodical RT 12 and RT 5 returns. Central Excise Officers were regularly visiting the factory for stock verification, internal audit etc. The three main sections in the appellant's factories are raw materials section, production section and finished goods section. Labourers give the details of number of pieces produced to the fitter, who in turn gives appropriate size ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85 MTs). 19-1-97 (42.040 MTs), 22-1-1997 (27.980 MTs) and 27-1-1997 (54.153 MTs) but the reports of Singanjude show Nil production of CTD bars on those dates. In the case of Hariyana Metals, R.G. 1 shows production of 91 .395 MTs. of Channels on 2-1-1997 while no production of these goods has been entered for that date in the private records, R.G. 1 shows production of angles on certain days in January 1997 while the private production reports do not show any production of angles, on 22-1-1997, 28-1-1997 and 29-1-1997, no production of Beams is shown in the production reports while R.G. 1 shows production and further the production of beams on 31-1-1997 as entered in R.G. 1 is in excess of the production shown in the said reports on the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, there is no material on record to establish that the appellants were receiving any raw material in excess of that shown in their raw material register, out of which they could manufacture goods found to have been clandestinely manufactured and removed. The statement of Shri Chandrakant Dahale which has been heavily relied upon in the impugned order is uncorroborated and has also been retracted, and therefore cannot be relied upon to prove unaccounted production and clearances. There is also no evidence of removal or sale of unaccounted production. Also keeping in view the annual production capacity is fixed by the Commissioner, the production for the period in dispute is comparable with the capacity determined and it has not been b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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