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2016 (9) TMI 80 - CESTAT HYDERABAD

2016 (9) TMI 80 - CESTAT HYDERABAD - TMI - Demand - clandestine manufacture and removal of plywood without payment of duty during the period 1998-99, 1999-2000 - non-accountal of basic raw materials for manufacture of plywood, namely the face veneers and the core veneers - Held that:- in the assessee's own case for different period on the show cause notice issued on very same allegation, the Tribunal after analysing the facts, evidence and law in detail has held the issue in favor of assessee - .....

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ufacture of Plywood falling under Chapter 44 of the Central Excise Tariff Act, 1985 and commenced their commercial production operations in June 1998. The manufacture of core veneers was commenced during November, 2001 and face veneers in the year 2002. The raw materials required for the manufacture of plywood are face veneer, core veneer, chemicals like phenol, formalin and resin/glue etc. Value wise, the cost of glue /resin will be about 20% of the total value of plywood. 2. The appellants ava .....

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all available records to examine whether the raw material received by the appellant and the finished products manufactured by them was fully accounted or not. As directed by the department, the appellants undertook to enter all the details in Form - IV account for the previous periods also. The officers again visited the appellants premises on 15-12-2000 and recovered records for the period November, 1999 to December, 2000. Thereafter, a statement of Shri P.K.Dash, Accountant of the appellants .....

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s set aside by the Tribunal vide Final Order No. 134/2003, dated 28-01-2003 and the matter was remanded for fresh adjudication. In the de-novo adjudication, the Commissioner of Central Excise, Visakhapatnam passed Order-in-Original No.64/03-04(RP) denovo dated 31-03-2004 wherein duty of ₹ 12,68,173/-was confirmed besides imposing penalty and interest. The computation of demand by the Commissioner is as follows: - Demand of duty on plywood on the unaccounted Quantity of face veneer ₹ .....

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ere adjudicated by the Adjudicating authority vide order dated 04-06-2004 and dated 27-09-2004. Being aggrieved therein, the appellant preferred appeal before the Commissioner (Appeals) and Commissioner (Appeals) vide Order-in-Appeal dated 28-12-2005 upheld the orders passed by the lower authorities. Being aggrieved therein, the appellant had preferred 3 separate appeals before this Tribunal vide Appeal No.E/828-830/2006. The Tribunal vide Final Order No.21477/2015 dated 14-08-2015 allowed the a .....

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on the above assumption. The appellants submit that there could be no mathematical precision in any industry as regards the input-out ratio. In many cases, the appellant shave used face veneers in the place of core veneers to achieve the required thickness. In view of the above factors, the department s assumption that a mathematically precise input-out of 2 sq.mt of face veneers to produce 1 sq.mts of plywood is impossible to achieve. The department has proceeded solely on the ground that 2 sq. .....

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ly required to be set aside. The appellants relied on the following decisions. - Dalmia Vinyl & Others vs CCE, reported at 2005(192) ELT 606 - Sapthagiri Cements & Others Vs CCE, reported at 2005(183) ELT 385. 6. The learned AR reiterated the findings in the impugned order. He submitted that the demand, in this case, is related to non-accountal of the basic raw materials for manufacture of plywood, namely the face veneers and the core veneers. The assessee was found to have maintained tw .....

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It is well accepted that the assessee is bound to account for the raw materials received and explain the shortage or excess satisfactorily. It is admitted that there are no standard norms fixed for the production of ply wood out of face veneers. The department has not fixed any input output ratio for the consumption of face veneers and production of plywood there from. But by common logic, when 2 face veneers of 4 mm thickness are required for manufacture of plywood, this ratio can be logically .....

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acts, evidence and law in detail has held the issue in favor of assessee. The relevant portion of the order is reproduced as under: 3.1 Learned counsel for the appellant submitted that the entire demand is based on assumption that 2 sq. mtrs. of face veneer is required for manufacture of 1 sq. mtr. of plywood. This assumption has been made on the basis of statement of Accountant of the appellant who also did not clearly admit that this the quantity is required for production. The whole case .....

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