9911796707
TMI Blog2022 (11) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... , fresh Containers manufactured and cleared in the guise of repaired containers as alleged by Revenue and therefore liable to duty. 1.1 Facts relevant to the matter are that the appellant - Atco Industries Ltd (now known as Atcom Technologies Ltd) (hereinafter referred to as "AIL")prior to March 1998 was engaged in the manufacture of electronic weighing scales and Time Recorders. In March 1998, AIL commenced manufacture of "Polycarbonate Containers/Bottles" of 20 litres capacity in addition to the manufacture of weighing scales and Time Recorders. Appellants, Sharad A. Doshi, Vineet A. Doshi and Vikram A. Doshi are Directors of AIL and T. N. Patel was an employee of AIL. Appellant, Atco Healthcare Ltd ("AHL") was one of the purchasers of Polycarbonate Bottles from AIL. 1.2 The said Polycarbonate Bottles manufactured by the AIL were exempted from payment of duty under Sr. No.57 of Notification No.4/97-CE dated 1-3-1997. This Notification was rescinded by Notification no.14/98-CE dated 2-6-1998 and with effect from 2-6-1998 Polycarbonate Bottles were exempt from duty under Sr. no. 69 of Notification no. 5/98-CE dated 2-6-1998, subject to condition No. 10 of the said Notification wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty on 80,000 Bottles and remanded the matter in respect of the demand for duty on 90,613 Bottles received under Rule 173H on the ground that the Commissioner had not considered and dealt with the AIL's submissions in respect of the said demand for duty on 90,613 Bottles. 1.7 In the de-novo proceedings with regard to the demand for duty on 90,613 Bottles received under Rule 173H, the Commissioner has again by Order-In-Original dated 18-12-2018 confirmed the demand for duty of Rs. 1,10,67,942/- on the said 90,613 Bottles and demand for duty of Rs.49,039/- on 490 Bottles received under Rule 173H. Further, the Commissioner has imposed penalty of Rs.1,39,83,421/- on AIL under Section 11AC of the Central Excise Act 1944. The Commissioner has also ordered confiscation of 23,887 Bottles which were seized in the factory on 17/18-9-1999 and has imposed redemption fine of Rs.35,83,050/- in respect of the same. The Commissioner has also ordered confiscation of land, building, plant and machinery and imposed redemption fine of Rs.5,00,000/- in respect of the same. Further, the Commissioner has imposed a penalty of Rs.25,00,000/- each on Atco Healthcare Ltd and Vikram A. Doshi and penalty of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was recorded of the Inspectors who have signed the same. He further submitted that Departments' case that vehicles were incapable of carrying the rejected and repaired goods is completely baseless. In this behalf, it is the submission of learned Counsel that if the vehicles were incapable of carrying the rejected and repaired Bottles, they also could not have carried the allegedly fresh manufactured Bottles. As regards, applicability of exemption notification no. 5/98-CE dated 2-6-1998 it is his submission that condition no. 10 prohibits taking of credit of duty paid on any other product manufactured in the same factory and does not bar taking of credit of duty paid on the inputs used in the manufacture of any other product manufactured in the factory and that since appellant-AIL have not availed credit of the duty paid on the bottles or of the duty paid on any other product manufactured in their factory, that are eligible for the exemption. 03. Shri G. Kirupanandan, learned Superintendent (AR) appearing for Revenue reiterated the finding given in the Order of the Commissioner. He pointed out that the Commissioner has in the Order-in-Original has rightly held that the rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of the Inspector, Form V Register, Forms Annexure C bearing receipt stamp/ signature of the Inspector and Invoices clearly establish the receipt of the goods cleared earlier, for the purpose of repairs, and the removal after carrying out of repairs. That the show cause notice has not disputed the genuineness of the aforesaid documents/ records; no statement has been recorded of the central excise officers who had acknowledged the said intimations and thus in the face of the said statutory documents/ records, the case of the department that no goods were received under Rule 173H for repairs and that what was cleared as repaired goods were in fact freshly manufactured goods cannot be sustained. 4.2 That the Commissioner has wrongly disregarded the aforesaid statutory documents on the ground that the Bottles received under Rule 173H, were not entered in the Inward-Outward Register maintained by the Security Supervisor, Gopal Singh Ram Singh Bhandari; that reliance placed by the Commissioner on the Inward-Outward register maintained by said Security Supervisor-Gopal Singh and on his statement is entirely misplaced. This Tribunal has in Para 13 of its earlier Order dated 16-9-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of T.N. Patel, these very vehicles carried the goods after repair and therefore if these vehicles could not have transported the rejected and repaired Bottles, they could also not have transported freshly manufactured Bottles. Therefore, the case of the department that under the guise of repaired Bottles, fresh manufactured Bottles were transported cannot stand on this ground also. 4.5 That similarly department's case that receipt of rejected Bottles was not supported by any lorry receipt/ other transportation document and that there was no proof of payment of freight is again not tenable in as much as what applied to receipt of rejected Bottles and their transport after repairs, equally applied to clearance of freshly manufactured bottles. The allegation of clearance of freshly manufactured Bottles is equally not supported by any document or proof of payment of freight. 4.6 That the Commissioner's finding that rejection of Bottles was without any reasonable ground or that the nature of the defects were such as required remaking of the Bottles cannot be appreciated without there being any evidence in support thereof. That in this behalf AIL has taken stand that the rejection of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e next financial year. That upon perusal of records, it appears that the actual consumption of Polycarbonate granules in 1998-99 was even less than 73918 Kgs. The said figure included 64,000 kgs of imported granules which though purchased and imported in 1998-99 were lying in Customs Bonded warehouse and were cleared from customs only in September 1999 as would be evident from the two Ex-Bond Bills of Entry for home consumption. 4.9 That it is settled legal position as laid down in the following judgments that a case for clandestine removal of goods cannot be said to have been made out merely by relying on the figures in the Annual Report: * CCE V UNIVERSAL POLYTHELENE INDUSTRIES-2001 (130) ELT 228. * UTKAL GALVANIZERS LTD V CCE - 2003 (158) ELT 42 * CCE V VANIFAB ENGINEERS P. LTD - 2006 (205) ELT 893. 4.10 That the department has not produced any evidence to show procurement of excess quantity of raw materials required to manufacture the quantity of Bottles which the department alleges was not return of repaired goods but freshly manufactured goods. It is settled law that in the absence of evidence of purchase of raw materials to manufacture the quantity of finished goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in not appreciating that Condition No.10 prohibits taking of credit of duty paid on any other product manufactured in the same factory and does not bar taking of credit of duty paid on the inputs used in the manufacture of any other product manufactured in the factory. Reliance, in this behalf is placed on the decision of the Tribunal in the case of CCE v Burman Laboratories (P) Ltd.- 2004 (176) ELT 375 in which it has been held that "what condition no. 10 provides is that the manufacturer does not avail of credit of duty paid on any product manufactured in the same factory. This condition does not convey the meaning that the manufacturer should not avail of credit of duty paid on inputs which are used in respect of other products manufactured in the same factory. The condition clearly provides that the manufacturer should not avail credit of the duty paid on any products manufactured in the same factory". Considering the above judgment, we are of the clear view the goods were otherwise also entitled to exemption from duty under serial no. 69 of the said notification no. 5/98-CE dated 2-6-1998. 4.13 That demand for duty of Rs.49,039/- is confirmed on 490 Bottles received unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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