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M/s PR Industries Versus Commissioner Of Central Excise, Delhi-I

2016 (3) TMI 517 - CESTAT NEW DELHI

Clandestine removal of manufactured goods viz. Nickel Alloy, Tin Alloy and Lead Alloy - duty demand along with penalty - Held that:- The appellant is entitled to avail cenvat credit on inputs used in clandestine manufactured and cleared goods viz. Nickel, Tin and Lead Alloys for the period 1989-90 on production of relevant documents. - The appellant is entitled to avail benefit of SSI exemption under notification no. 173/86-CE dated 1.3.86 for the period 1989-90. - No interest is payable .....

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JINDAL, MEMBER (JUDICIAL) AND B RAVICHANDRAN, MEMBER (TECHNICAL) For the Petitioner : Shri J P Kaushik & V R Sethi, Advs. For the Respondent : Shri Govind Dixit, DR ORDER PER: ASHOK JINDAL: The appellant is in appeal against the impugned order confirming the demand of duty of ₹ 50,10,034 along with interest and a penalty or ₹ 50 lakhs. 2. The facts of the case are that a show cause notice was issued to the appellant on 7.6.1993 on account of clandestine removal of manufactured g .....

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order was challenged by the appellant before this Tribunal, vide order dated 7.12.1999, this Tribunal confirmed the charge of clandestine removal and also upheld the demand of ₹ 11,15,593.30 for the period 1988-89 for clearance of Nickel Alloy, Tin Alloy and Lead Alloy. For the payment of subsequent period, the matter was remanded for de novo adjudication to the Adjudicating Authority for re-calculation of the demand as contested by the appellant. In remand proceedings vide order dated 29. .....

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77; 38,94,439/- in addition to the demand already confirmed by the order dated 7.12.99 and imposed a penalty of ₹ 50 Lakhs under Rule 173 Q of the Rules. 3. Ld. Counsel for the appellant submits that initially the charge of clandestine removal was proposed on three metals viz. Nickel, Tin and Lead alloys but the adjudicating authority has confirmed the demand for six metals viz. Nickel, Lead, Tin, Copper, Zinc and Cadmium alloys. It is the contention of the ld. Counsel that there is no all .....

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this Tribunal in the case of CCE, Coimbatore Vs. S.S. Radiators reported in 2002 (49) RLT 210 (CEGAT-Chennai). 3.2 He also submits that the appellant is entitled to avail benefit of SSI exemption for the period 1989-90 onwards as their clearance during 1988-89 was 81,52,454.13. Therefore, as per notification no.174/86-CE dated 1.3.86 they were entitled for the benefit of SSI exemption as held by this Tribunal in the case of Premier Rubber Factory Vs. CCE reported in 1990 (47) ELT 125 (Tribunal) .....

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In these circumstances, the impugned order is to be set aside and demand of duty and penalty be re-quantified. 4. On the other hand, ld. AR supported the impugned order and contested that the show cause notice is issued to the appellant on the basis of the sales tax figures shown by the appellant in their ST return to the Sales Tax Department which includes the turnover of Copper, Zinc and Cadmium alloys. He also submits that as it is a case of clandestine removal of clandestinely manufactured g .....

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find that the impugned order has been challenged by the appellant on the following grounds: - (a) The show cause notice proposed to demand duty on the clandestinely manufactured and cleared goods viz. Nickel Alloy, Tin Alloy and Lead Alloy and apart from the three metals mentioned hereinabove, that the demand for Copper, Zinc and Cadmium Alloys was not part of the show cause notice as in the show cause notice, the demand of duty has been proposed against the appellant for the clandestine manufac .....

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ether in a case of clandestine removal of the goods the appellant is entitled to avail cenvat credit on the inputs used in manufacture of clandestine clearance or not. The issue came up before this Tribunal in the case of S.S. Radiators (supra) wherein this Tribunal held that the assessee is entitled to avail cenvat credit on the inputs used in the manufacture of clandestinely manufactured and cleared goods and no contrary decision has been produced by the ld. AR. In that circumstances, it was h .....

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nder:- "5. We have carefully considered the submissions made before us. On going through the records, we find that the quantum of duty has been worked out on the basis of consumption of Sulphur by the appellants, for the period in question with reference to the accounts maintained by the appellants. We find considerable force in the submission of the learned Consultant that the quantum with reference to the applicability of various Small Scale Industries Exemption Notifications applicable t .....

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We are not expressing any opinion on the question as to what extent the appellants would be entitled to the benefit of Exemption Notifications in respect of the quantity alleged to have been clandestinely removed by them. Such an exercise is not possible at the appellate stage without reference to the original records. In the Special Bench Ruling in the case of Atlas Radio Electronics Pvt. Ltd. referred to above, it has been held that the concessional rate laid down in the Exemption Notification .....

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the Notification. Since a specific plea in this regard has been taken by the appellants with reference to the applicability of various Small Scale Industries Notification and entitlement thereto and since the same has not been adverted to much less considered in the impugned order, without expressing any opinion on merits with reference to the applicability of the various Exemption Notifications and leaving the issue to be decided by the adjudicating authority, we set aside the impugned order a .....

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sideration, we find no merit in either of the aforesaid grounds advanced by the Revenue. The concessional rate laid down in the exemption notification was not dependent on the condition that it would be applicable to only those manufacturers who had disclosed their manufacturing activity to the department and would not be applicable to others in whose case the manufacturing activity was detected later by the department. The rate of duty was quite independent of the questions of taking out a lice .....

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ry assessee held guilty of unauthorised removals would have to pay duty only at the higher tariff rate and that they would stand debarred from availing of the exempted rate, even though otherwise applicable, by the mere reason of their suppressed activity. 3. We also find no condition laid down in the aforesaid exemption notification to the effect that the grant of set off or reduction in duty would be dependent on Rule 56-A procedure being followed. In the absence of such a mandatory condition, .....

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