TMI Blog2002 (1) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... talling ₹ 2,25,000/- imposed on him under Rule 209A of the Central Excise Rules have been challenged. As far as the Personal Penalty imposed on R.B. Patel is concerned, he has filed an Appeal E-105/99 wherein he has challenged imposition of penalty of ₹ 10,000.00. 2. The assessee-appellants, were engaged in manufacturing of 2 varieties of clocks namely simple clock and musical clock. Four orders in original have been challenged. We are concerned with the orders of confirmation of demand passed by the adjudicating authority where under he has confirmed the duty demand and imposed penalties. 3. Following are the details of duty demanded and penalties imposed appellants wise in the four orders-in-original which are under challenge before us : Description E/101/95 Ajanta-Transistor Clock Mfg. Co. E/121/95 Jayshree Industries E/103/95 Ellora Electronics E/102/95 Ajanta Time Industries Total Demand of Excise Duty 16997077 8917470 7511742 10696772 44123061 Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere has been clandestine removal, the only basis on which demand has been confirmed was the so called consumption of few of the raw materials by the assessee which is wrong. The adjudicating authority rejected the plea of the assessees as well as the other two appellants and confirmed the demand and hence the 9 appeals have been filed before us. 8. We heard S/Shri V. Sridharan, D.H. Shah and R. Nambirajan, Advocates for the appellants and Smt. Reena Arya SDR for the Respondent Department. 9. Mr. Sridharan who argued for the appellant, stated that the basis of the confirmation of demand by the adjudicating authority is wrong inasmuch as by taking note of only the consumption of few raw material which go into manufacturing clocks it cannot be concluded that the production was suppressed. He further argued that unless a physical verification of all the raw material available on the date of the visit of the officers was done there cannot be a proper confirmation of demand of duty. He states that for manufacturing clock, it is not only the Melody I.C., Jhoomar Movt., Timer l.C., Stepper motor are involved, but also other raw materials are involved as indicated in the flow chart wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have cleared the inputs from the factory to the job workers for processing and obtained the processed inputs from the job workers and used the same in the manufacturing of the final product. The argument on behalf of the appellant was that even at the time of giving the spot statement it was submitted that all the 4 units were situated in the same industrial shed and inputs on which Modvat credit was availed and the final product was not cleared outside the factory. 11. Smt. Reena Arya, learned SDR who appeared for the Revenue reiterated what is contained in the Orders-in-Original, She specially invited our attention to Para 4 of the Order-in-Original No. 30/Collector/1994, dated 21-10-94 in the case of Ajanta Time Industries (Appeal No. E-102/95) and stated that the assessee, in this case have definitely removed the final product from the factory without properly reflecting in the production register. 12. We have considered rival submissions. 13. The process of manufacture of clocks involves manufacture of various components/parts and ultimate assembling of these into clock. One of the major items used in the manufacture of the aforesaid clock is the Clock Movements. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order against this assessee-appellant is as follows :- I. (a) Demand on 6,43,873 Nos. of musical clock ₹ 1,13,32,165 (b) Demand on 15609 Nos. of jhoomar clocks Rs. 4,72,172 (c) Demand on 187674 Nos. of chiming devices ₹ 20,65,440 (d) Demand on 2843000 Nos. of ECB ₹ 31,27,300 Total : ₹ 1,69,97,077 II. Demand by disallowing Modvat credit on inputs ₹ 21,84,353 Grand Total : ₹ 1,91,81,430 20. The appellants were directed by the Superintendent of Central Excise to furnish the quantity of raw material purchased. The appellants vide their letter dt. 3-9- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officials conducted by the Counsel on behalf of the appellants before adjudicating authority. The relevant portion of Cross Examination of Shri J.J. Fernandes, Superintendent of Central Excise; conducted by the appellants on 8-2-94 before the adjudicating authority is as under : Q.8. Is it correct to say that same quantity of inputs is recorded at different stages in different delivery Challan Books ? Ans : Yes. Q.9. Manu Bhai Patel has stated in his statement that Delivery Challan book are maintained for the internal movement of inputs and keeping a moral control and check on the worker. Have you got any evidence to falsify the said explanation about Delivery Challan Books ? Ans : I have never disputed. Q.12. Is it correct that name of the consignee or receiver of the inputs has not been written on the delivery Challan Books ? Ans : Yes. Q.15. Can you point out a single piece of documentary evidence where the alleged suppressed production of Wall Clocks have been recorded by four manufacturing units. Ans : The base of these case may be taken from the figures appearing in the delivery challans and taking into account the raw materials used into production o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial of Modvat credit on inputs on the ground that the inputs on which Modvat credit was taken were removed to the job workers by the appellants without prior permission under Rule 57F(2). A perusal of Para 14 of the show cause notice shows that, the use of all the processed material received from the job workers in the manufacture of the final product is not in dispute. When that is the case, we fail to understand as to how just because permission of the competent authority is not obtained, the assessee can be denied the Modvat credit ? It is true that there should be compliance of statutory requirement by the assessee. However it is not the case here that the manufacturer viz. Ajanta Transistor Manufacturing Co. did not file any declaration under Rule 57G, the nature of the transaction, namely existence of job workers being with the same premises. In this case we see that there are certain minor violation. However such violation may not follow complete denial Modvat credit. As stated above it is not the department s case that the job workers, had not return the processed material and the same was not shown to be used in the manufacture of final product. Therefore, we are of the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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