TMI Blog2017 (5) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... landestine removal of Nickel and articulated fire with intent to destroy documents will constitute deliberate acts of suppression has to be examined. All these issues need to be reconsidered - matter on remand. The plea of appellant that they have reversed the credit prior to utilisation has to be looked into - matter on remand. Appeal allowed by way of remand. - E/30950/2016-SM - A/30492/2017 - Dated:- 28-3-2017 - Ms. Sulekha Beevi, C.S., Member (Judicial) Shri Z. U. Alvi, Advocate for the appellant. Shri P.S. Reddy, Asst. Commissioner(AR) for the Respondent [Order per: Ms. Sulekha Beevi, C.S.,] The appellants are aggrieved by the order passed by commissioner who confirmed the duty along with interest and imposed penalties. 2. The appellants are manufacturers of gas turbines, steam turbines, pumps etc. and are registered with the Central Excise Department. They are availing the facility or CENVAT credit on inputs and capital goods. During the course of audit by Accountant General Office, it was noticed that appellants had availed irregular credit of ₹ 86.52 lakhs on 23 tonnes of Nickel, which was alleged to be misappropriated by the employees o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nickel removed to be 5411 kgs. and confirmed the duty demand to the tune of ₹ 21,15,313/- along with interest and imposed equal amount of penalty. Being aggrieved, the appellants are now before the Tribunal. 3. On behalf of the appellant, the learned counsel Shri. Z.U. Alvi submitted the following main contentions:- i. That the demand has been raised alleging that appellant is required to reverse the credit availed on inputs (Nickel) as these were not used in the manufacture of final products. The said Nickel which was removed y misappropriation of employee of the company was done with the knowledge of the company. The persons in-charge of store (CMM store) while indulging in removing the precious metal, Nickel, from the store stealthily and clandestinely was not acting in the course of their employment. It can neither be said that it occurred on account of negligence on the part of appellant. That Department has not established that removal of nickel from the factory was by way of negligent performance of their duty in the course of employment. At the time of receipt of nickel, it was intended to be used in manufacture of finished product. The appellant company having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he credit on this quantity immediately before utilisation and had sufficient balance on the date of reversal of credit, the demand of interest and imposition of penalty is against law. To canvass this argument, the learned counsel relied upon the judgment in the case of CCE ST, LTU, Bangalore Vs. Bill Forge Pvt. Ltd. [2012(279) ELT 209 (Kar.)], CCE, Madurai Vs. Strategic Engineering (P) Ltd. [2014-TIOL-466-HC-MAD-CX]. The Learned counsel has also referred to the judgments in the case of Sitaram Motilal Vs. Santanuprasad Jaishanker Bhatt [LAWS(SC0-1966-2-7], CCE Vs. Chemphar Drugs Liniments [1989(40) ELT 276 (SC)] and in State of Maharashtra Vs. Kanchanmala Vijaysing Shirke [LAWS(SC)-1995-8-87] to content that appellant company cannot be held liable to reverse the duty, since the removal of Nickel by employees was not done authorisedly or in the course of employment. 4. Against this, the learned AR Shri P.S. Reddy reiterated the findings in the impugned order. He submitted that the appellant company is a manufacturer who was clearing goods on payment of duty. Therefore the appellant company is liable to follow the provisions of Central Excise Act and Rules. The said Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as accepted the computation made by the Senior Level Committee as the quantity of Nickel removed to be 5411 kgs. and not 23 tonnes as reported in the General Manager s report. In the reply to show-cause notice, the appellants have accepted this figure and have reversed the credit. Therefore the demand of duty, interest and penalty imposed is to be sustained. 7. I have heard the submissions made before me. 8. the first and foremost contention to be looked into is that in the show-cause notice, the period stated in 2007-08 whereas the adjudicating authority has confirmed the liability of ₹ 21,15,312.85 on 5411 kgs adopting the report of Senior Executive Committee report. In such report, the said quantity of 5411 kgs. was removed during the period 2001-02 to 2007-08. The show-cause notice is issued for demand of ₹ 86,52,000/- on 23 tonnes of Nickel removed. It appears that the adjudicating authority has mechanically adopted the Senior Executive committee s report instead of arriving at an independent conclusion with regard to quantum of irregular availment of credit on Nickel during the period 2007-08 raised in the show-cause notice. 9. The figures shown in the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on date wise basis and also because department did not accept the figure of 5411 kgs. by issuing show-cause notice for 23 tonnes, the confirmation of duty demand is not correct. It is also argued by the counsel that appellant company cannot be saddled with suppression of facts with intent to evade payment of duty. I have to mention that it is not disputed that the documents regarding the issuance / removal of Nickel were lost in fire. It is also revealed that such fire was not by accident but articulated. Whether these incidents of clandestine removal of Nickel and articulated fire with intent to destroy documents will constitute deliberate acts of suppression has to be examined. All these issues need to be reconsidered for which, I deem it fit to remand the matter to the adjudicating authority. 11. On behalf of the appellant, the learned counsel produced documents showing details of the CENVAT credit balance for the years 2002-03 to 2011-12. It is submitted by him that they have reversed the credit before utilisation and therefore the demand of interest and penalty imposed is not proper. This plea of appellant that they have reversed the credit prior to utilisation has to be lo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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