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TMI Blog2018 (2) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... both. The appellants obtained fly ash for use in the manufacture of Asbestos products. M/s.Natesan Engineers and Contractors (NEC) was engaged by them for the purpose of supply and transportation of the allotted quota of fly ash from Mettur Thermal Power Station (MTPS). The factory of M/s.Visaka Industries Ltd. was visited by the officers on 27.08.2005 and investigations were conducted. Pursuant to verification of documents and statements recorded, it appeared that appellants had not used 25% of fly ash in finished products and thus was not eligible for benefit of Notification No.6/2002. SCN was issued proposing to demand an amount of Rs. 15,37,57,177/- towards Central Excise duty on asbestos cement sheets cleared by M/s.Visaka Industries Ltd. during the years 2003-04 and 2004-05 on charges that they had wrongly availed Exemption Notification No.6/2002 by accounting bogus / excess fly ash receipts. The show cause notice was also issued to M/s.Natesan Engineers and Contractors alleging that they have connived in raising documents for bogus receipt of excess fly ash. After adjudication, the original authority confirmed demand to the tune of R.13,23,85,374/- and imposed equal penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TPS and the remaining 20%were to be allotted to the brick industries. The cement companies established their respective silos for collection of fly ash. iii) Since the cement companies had precedence over the fly ash from 2003, the periodical quantity received by the appellant started to reduce and it was completely left to the discretion of MTPS. The quality of the fly ash also depleted. iv) In view of the change, the appellant was forced to procure fly ash from the open market to meet their requirements. In some cases, the appellant approached the cement companies such as M/s.Chettinad Cement Corporation Ltd. etc. for procurement from their allotted quota. In other cases, the appellant engaged NEC for procurement from other sources in the open market. v) In effect, after August 2003, due to the change in mechanism of distribution of fly ash and the difficulty in procurement of fly ash, it became a freely traded commodity in the market. The cement companies started selling fly ash from their silos to other parties. vi) Accordingly, the appellant either directly or through NEC procured fly ash from various sources. The total fly ash procurement during the impugned period is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant since the transportation of the same would require additional cost. During the course of the year, whenever there was shortage of fly ash or when there was superior quality of fly ash available, the same was mixed with the rejected quantity and thus appellant consumed rejected quantity in the manufacture of asbestos sheet. M/s.NEC has raised Bill No.439 dt. 11.08.2005 for this quantity of fly ash. Therefore the receipt of 954.63 MTs is fully correct. Another ground for alleging bogus receipt of fly ash is that lorry numbers TN 28 J 5999, TN 28 A 3366 and TN 28 3135 mentioned in the registers of the appellant are fictitious as these numbers belong to Ford model car and other vehicles. The appellant made verification and has found out it was minor clerical error while noting down the number of vehicle in the records. The appellant has obtained clarification regarding the same and has also produced documents showing correct number of vehicles which is appended along with miscellaneous application. As per this document, it can be seen that vehicle number TN 28 J 5999 has been wrongly noted by the appellant and the correct number of the vehicle is TN 28 J 5099. Similarly, TN 28 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bogus consignment notes for dispatch of fly ash over and above the quantity of fly ash actually lifted from MTPS. Thereby the percentage of fly ash contained in the finished products would be reduced to 24.54% and 16.27% in the respective financial years which is below the stipulated level of 25%. No evidence was furnished by the appellant that M/s.NEC procured fly ash from other sources and supplied to them. Further M/s.NEC has not obtained sales tax registration and no bills were produced for buying fly ash from small allotees of MTPS. Therefore the case of the appellant that NEC procured fly ash from small allotees and open market and supplied to Visaka Industries cannot be accepted. MTPS has specifically laid down various conditions in the issue order of fly ash. One such condition is that no part of the issue order for fly ash shall be split or transferred to others without written permission. Thus claim of M/s.NEC that they got fly ash from other small allotees is totally without basis. The demand raised is legal and proper. 5. Heard both sides. 6. The allegation is that M/s.Visaka Industries Ltd. intentionally resorted to accounting of bogus / excess fly ash receipts in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the reply to the notice as well as in the appeal that they have received supply of fly ash not only from MTPS but also from various other sources. In fact, the appellant has stated in the reply as under : 2. At the outset, we thank the Hon'ble Commissioner for allowing cross-examination of Sri N. Santhoshkumar as witness in this case. During the cross examination held on 19/11/2008 Sri N. Santhoshkumar inter-alia started that M/s.Natesan Engineers & Contractors and Natesan Construction Products are agents to many fly ash utilization companies like cement companies ACC, Asbestos Companies like Visaka, Readymix concrete plants like ACC RMC, RMC India Ultratech Readymix, R.B.S Readymix, Ganesh Concrete etc., and brick units like Sakthi Interlock and others; that no documents are given by MTPS for them for transport; that they are using their own consignment note for those companies to whom they are supplying fly ash; that they are collecting fly ash from MTPS through tipper lorries and they are dumping the same in the Sankari Yard and from there they are packing and supplying it to many companies; that apart from the allotment of M/s.Visaka from MTPS they also got material ..... X X X X Extracts X X X X X X X X Extracts X X X X
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