TMI Blog2017 (7) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 of the CER, 2002. The appellant shall be entitled to take credit, of the Cenvat credit reversed for HDPE Bags. Further, I find that there is no contumacious conduct nor any suppression of facts as is evident on the face of the record. In this view of the matter, I set aside the balance demand of Cenvat credit as confirmed, vide the impugned order under Rule 15 (2) of Cenvat Credit Rules, 2004. I also set aside the penalties imposed, under all the Sections and/or Rules. The appellant shall be entitled to take credit of the balance Cenvat, if any. Appeal allowed - decided partly in favor of appellant. - E/144 & 151/2008-EX[SM] - A/70598-70599/2017-SM[BR] - Dated:- 20-4-2017 - Mr. Anil Choudhary, Member (Judicial) Shri Vineet Kumar Singh, Advocate, for Appellant Shri Sandeep Kumar Singh, Deputy Commissioner (AR), for Respondent ORDER Per: Anil Choudhary The appellant is engaged in manufacture of Portland Pozzolana Cement of different brands falling under chapter heading 252329.30 of the Central Excise Tariff Act, 1985. The inputs used by the appellant in manufacture of cement are clinker, gypsum, fly ash and HDPE Bags. Out of these four HDPE Bags ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... breakdowns. On the question of excess/shortage he stated that at the time of taking over of the factory, it was told by the previous owners of the unit that the physical stock of clinker was 3912.00 MT as shown in the stock register and also other stocks as per the stock register. Since they were new in this field and due to lack of experience, could not verify the stock position. So far excess Fly Ash is concerned he explained that a truck loaded with Fly Ash (about 31.830 MT) reached the factory on the day, which is included in the physical stock and that the same could not be entered in the stock register till the arrival of the inspection team. Mr. Kamal Potddar - Manager of the Company accepted the shortage/excess of Clinker, Gypsum HDPE Bags in the stock. Further statement of Mr Kamal Potddar was recorded on 7 th December, 2005 wherein he accepted the difference shortage/excess in stock, as found at the time of physical verification of the stock on 28 th September, 2005 by the Preventive Officers. Further by communication dated 25/10/2005, the appellants informed the Revenue that the losses occurred due to natural reasons and that at the time of taking over of the factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... range office appellant have intimated to have reversed the Cenvat credit taken on the inputs of ₹ 14,17,500/- + Education Cess ₹ 28,350/-, vide debit entry dated 26/11/2005, under protest. It was also informed to Revenue that appellant have further reversed Cenvat credit taken on inputs ₹ 2,45,000/- + Education Cess ₹ 4,900/-, vide debit entry dated 24/03/2006 as such total Cenvat credit reversed or debited is ₹ 16,95,750/-. Accordingly, the appellant was required to show cause vide Show Cause Notice dated 30/08/2006 as to why Cenvat credit wrongly taken by them on the inputs found short to the tune of ₹ 25,71,875/- (as per details given Annexure-I to SCN) be not demanded and confirmed and further why not the credit so far reversed be not appropriated and the balance ₹ 8,76,125/- be not demanded with further proposal to impose penalty under Rule 15(2) of Cevnat Credit Rules, 2004 with further proposal to impose penalty under Rule 27 of Central Excise Rules, 1944, for failure to maintain proper records. 5. The appellants contested the Show Cause Notice by filing reply, it was urged that the allegation of clearance/removal of Clinker HD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs clandestinely nor any such buyer of the Cenvatable inputs have been identified. In view of the admitted fact that the clinker is restored on the factory floor, in the open the same also spreads over the area and some part of it becomes unrecoverable over the course of time due to mixing with the soil and/or erosion, etc. It is an apparent fact that the factory shed has a thick layer of clinker which was not taken into account at the time of stock picking. The ld. Counsel for the appellant also urged that the shortage in handling and transportation of clinker have been accepted by Hon ble Allahabad High Court in the case of U. P. State Cement Corporation Ltd. Versus Union of India reported at 1996 (86) E.L.T. 6 (Allahabad) wherein under similar facts and circumstances, where the manufacturing point of clinker and the cement plant are situated about 125 km. away. The Hon ble High Court relying on its earlier judgment and also judgment of Hon ble Supreme Court in the case of J. K. Steels Ltd. Versus Union of India reported at 1978 (2) E.L.T. (J 355) (SC) observed that Revenue have not disputed that the transit losses have actually occurred in the handling and transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed during investigation under protest ₹ 16,95,750/- was appropriated with further direction to pay the balance demand ₹ 8,76,125/- along with interest and further equal amount of penalty ₹ 25,71,875/- was imposed under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 and further penalty of ₹ 5,000/- was imposed under Rule 27 of Central Excise Rules, 2002 on the appellant company for contravening the provisions of Central Excise Act /Rules made thereunder. 9. The appellant have preferred appeal before this Tribunal on the various grounds as hereinabove noticed. Accordingly, the appellant prays for setting aside the impugned order under the admitted facts that there is no clandestinely removal on the part of appellant found by the Revenue and also in view of the ruling of Hon ble Allahabad High Court in the case of U. P. State Cement Corporation Ltd. Versus Union of India (supra). 10. The ld. A. R. for revenue relies on the impugned order. He further draws my attention to findings in paragraph 17 of the impugned order. Although in the instant case, there is no finding or any corroborative evidence for rem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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