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2016 (9) TMI 730 - CESTAT CHANDIGARH

2016 (9) TMI 730 - CESTAT CHANDIGARH - TMI - Generation of waste during manufacturing process - allegation of clandestine removal of goods - It was submitted by the respondent that there was nominal burning loss of 1.15% and 1.19% during the said period. - Held that:- The whole investigation/ audit remained faulty and the show cause notices were issued to both the respondents in the wake to allege the respondent no.1 has cleared the goods clandestinely. In the show cause notice it was not consid .....

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sssessee. - E/1224-1225/2012-(SM) - Final Order No. A/61014-61015/2016-SM(BR) - Dated:- 6-7-2016 - Mr. Ashok Jindal, Member (Judicial) Sh. G.M. Sharma, AR for the appellant Sh. Sudhir Malhotra. Advocate for the respondent ORDER The Revenue has filled these appeals against the impugned order quashing the proceedings initiated against the respondent. 2. The brief facts of the case are that the respondents are engaged in the manufacture of ERW Pipes/Galvanized Pipes which was registered with the Ce .....

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is no heating process involved, therefore, there was not any burning loss and alleged that the said quantity has been cleared by the respondent clandestinely without payment of duty. In reply to the audit objection by the Range officers and it was explained by the respondent there was no such burning loss. There was waste and scrap arose during the manufacturing process and the same has been cleared to their sister concern on payment of duty and the same has not been considered by the audit. It .....

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ices issued by M/s Sadashiv Structural Pvt. Ltd. to allege that only invoices have been manufactured and no such goods have been manufactured. The show cause notices were adjudicated and the demand of duty on the alleged shortage was confirmed along with interest and equivalent amount of penalty was imposed and cenvat credit was denied to M/s Sadashiv Casting P. Ltd. consequently, duty was demanded alonwith interest and equivalent amount of penalty was imposed. The adjudication order was challen .....

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to pay duty along with interest and is to be penalized. He submits that the respondent no.2 never received the goods and only received the invoice, therefore, they are not entitled to avail cenvat credit. Consequently, they are liable to pay duty along with interest and are to be penalized. He also relied in the case of N.P. Agro (I) Industrial Ltd. reported in 2015 (315) ELT 484 (Allahabad), Sita Cement Ltd. reported in 2003 (153) ELT 204 (Tri. Kolkata) and Gulabchand Silk Mills Pvt. Ltd. repor .....

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yment of duty. The departmental officers never recorded any statement of any other respondent and without considering the said reply submitted by them while issuing the show cause notice alleging clandestine removal of goods by respondent no.1 and cenvat credit taken by respondent no.2 by invoking extended period of limitation. In fact, the respondent has replied in September 2008 itself that there was no shortage and they have cleared goods like waste and scrap on payment of duty but without co .....

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ent that the respondent no.1 shown as burning loss to the tune of 5.62% to 5.68% respectively during the period 2006-2007 to 2007-2008 and no statement was recorded of any person to explain such shortage. No effort was made to examine whether during the course of manufacture, any waste and scrap arose or not ? Further, when the respondent no. 1 explained that they have cleared waste and scrap on payment of duty, no effort was made to ascertain the truthfulness on the fact. No effort was made to .....

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quired to be demanded. 7. Further, I find that during the course of adjudication also there was no application of mind by the adjudicating authority by not considering that the duty paid on waste and scrap by the respondent no.1 for demanding duty on account of clandestine removal of goods. The said adjudication order was challenged by the respondent before the Ld. Commissioner (A) who in the absence of any corroborative evidence produced by the Revenue had relied on the explanation given by the .....

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