TMI Blog2016 (4) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... were not sent for washing, there was no weight loss. However, since the disputed nine consignments were sent for washing, the loss in weight has occurred. Thus, the reasoning advanced by the revenue cannot be a defensible ground for disallowance of Cenvat credit. The coal was sent for washing and the loss in weight occurred due to its processing as apparent from the records of the appellant. It is also found that the certificate issued by the 'Central Institute of Mining & Fuel Research, Bilaspur Unit (Council of Scientific & Industrial Research), Bilaspur (Chhattisgarh) working under Ministry of Science & Technology, Govt. of India clarifies that there is positive correlation between percentage of Ash reduction & loss of coal volume i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the process of washing, there are certain losses in the quantity of coal. Thus, the appellant receives lesser quantity of good quality coal in its factory for use in the intended purpose. In the present case, during the course of verification of records by the Central Excise Audit wing, it was detected that in cases of 9 consignments, lesser quantity of coal have been received in the factory of the appellant, as compared to the invoiced quantity. The Revenue entertained the view that the short received coal was not used in the manufacture/ production by the Appellant, and hence, the appellant is not entitled for Cenvat credit for the short receipted quantity. Accordingly, Show Cause Notice was issued, seeking disallowance of cenvat cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. CCE, JSR, reported in 2011 (264) ELT 385 (Tri.) and CCE, Mumbai Vs. Bharat Radiators Ltd., reported in 2002 (148) ELT 1101. He also placed reliance on the delivery order of M/s South Eastern Coal field, which bears the name of the washery as well as bills issued by the washery, showing the quantity of coal delivered after washing. He also stated that since all the documents and records were produced before the audit wing of the Central Excise Department, the charges of suppression or malafide intention for defrauding the Govt. Revenue cannot be leveled against the appellant, justifying imposition of penalty under Rule 15 of CCR Rules, 2004. 3. The Ld. Advocate also filed a written submission, reiterating his above submissions and als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Raw coal of Gevra mines from which Appellant purchased coal of -250mm, and it was based on quality of Raw coal available in the respective colliery, offer of the washery for Ash reduction yield % as per bench mark/norms of the coal washery Industry. He also enclosed copy of certificate issued by 'Central Institute of Mining Fuel Research, Bilaspur Unit (Council of Scientific Industrial Research), Bilaspur (Chhattisgarh) working under Ministry of Science Technology, Govt. of India, which clarifies that there is positive correlation between % of Ash reduction loss of coal volume i.e. yield of washed coal. That as per the said certificate, on 1 % of Ash reduction in Coal, there is volume loss of approx. 2.5% which has been reflec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was short received on account of the loss associated with the washing of coal in coal washery. The revenue is of the view that since there was no short receipt in case of other consignments, the explanations offered by the Appellant is not convincing. I find from the delivery orders that while issuing the same to the Appellant, M/s SECL also mentioned therein the name of Coal washery M/s ACS (India) Ltd. - CHAKABURA for processing of coal. The said Coal washery after undertaking the process of benefication of coal had charged service tax thereon and cleared the same to Appellant. The facts of the case are thus not much in dispute. It is an accepted fact that the coal was sent to Coal Washery for processing of coal so that it can be used in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Energy Agency loss in coal washery accounts for 20 - 30% loss through the separation process for mineral matter from the coal. In such view of undisputed facts as well as submission of the Appellant, I am of the opinion that the reasons canvassed by the revenue for disallowing cenvat credit is not sustainable. I also find that there is no ground to impose penalty under Rule 15 of the Cenvat Credit Rules, 2004 as the demand is itself not sustainable. Further in SCN, no facts have been brought on record which can show the malafide intention or suppression on the part of the Appellant. I, therefore, hold that the penalty imposed on the appellant is also not sustainable. 7. In view of my above observations, I hold that the impugned order is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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