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TMI Blog2023 (12) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... 44 and a penalty of Rs. 1,00,000/- upon the Appellant No. 2 under Rules 26 of the Central Excise Rules, 2002. Aggrieved against the impugned order, both the Appellants filed appeal before this tribunal. 2. The Appellant is engaged in the business of manufacture of various grades of free flowing dried urea formaldehyde resin powder such as, Strong Bond P-101G, Strong Bond P-102P, Strong Bond P-105E and Strong Bond P-202G falling under Chapter 39 of the First Schedule to the Central Excise Tariff Act, 1985 at its factory at Rampur, West Bengal. The Appellant set up its manufacturing facilities in June, 2007 adjoining the factory of its sister concern, Allied Resins and Chemicals Limited (hereinafter referred to as "Allied Resins"), which manufactured the liquid resin used by the Appellant to manufacture the resin powder. The liquid resin required by the Appellant for the manufacture of resin powder was purchased by it from Allied Resins. Allied Resins supplied the liquid resin through pipeline directly from its factory to the Appellant's factory. The Appellant obtained central excise registration on November 5, 2007 and started production from December 2007. Prior to the Appellant o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of finished goods transferred to the Delhi depot during the period April 2008 to February 2009 since it had not followed the provisions of The Central Excise (Determination of Value of Excisable Goods) Rules, 2000 (hereinafter referred to as "the Valuation Rules") 5. The Notice was adjudicated by the Commissioner vide the impugned Order-in-Original No. 13/COMMR/CE/KOL-V/ADJN/10 dated March 12, 2010, wherein he has passed the following orders: (i) Confirmed the duty demand of Rs.61,24,002/- including Education Cess and SHE Cess, relating to unaccounted manufacture and clearance of U F Resin Powder, to Rampur Unit of Allied Resins. (ii) confirmed the duty demand of Rs.22,99,672/- including Education Cess and SHE Cess, relating to clandestinely cleared goods not accounted for in physical stock verification. (iii) Confirmed duty demand of Rs. 1,50,540/- relating to under valuation of stock transferred goods. (iv) Imposed penalty of Rs.85,74,214/- on the Appellant under Section 11AC, of the Central Excise Act, 1944. (v) Imposed penalty of Rs.1,00,000/- on Shri. R K Vijay, CEO under rule 26 Of Central Excise Rules, 2002 read with Section 9(1) of the Central Excise Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 515 MT Total powder ought to be produced (A) = 3967.515 * 55% = 2182.13 MT Total Powder Produced (B) = 2146 MT Shortage of powder production (B) - (A) = 36.13 MT Total Duty Payable for shortage of power Value of 36.13 MT on the basis of rate of goods taken by the Department at Rs. 58000/MT = 20,95,540 Cenvat Duty @14% =2,93,375 Education Cess@2% =5,867 H E Cess @1 = 2,933 Total Duty Payable =3,02,176 Accordingly, the Appellant submits that they are ready to pay the Duty amounting to Rs. 3,02,176 along with interest for the shortage of 36.13 MT. (iii) Regarding the confirmed demand of duty Rs. 1,50,540/- relating to under valuation of stock transferred goods, the Appellant has not disputed this liability. (iv) The Appellant further submits that under the facts and circumstances of the instant case, the extended period of limitation cannot be invoked in this case. When there is no liability of duty, no interest is chargeable under the Act. Also, the question of imposition of penalty under section 11AC does not arise. (v) In the impugned order, a personal penalty of Rs. 1,00,000/- has been imposed upon the Appellant No. 2 under Rule 26 of the said Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en alleged that UF resin powder produced was 55% of the weight of liquid resin. Accordingly, it has been held that excess production of 349023 kg of UF resin powder was manufactured and cleared clandestinely. The Appellant submits that even if it is accepted that UF Resin Powder produced was 55% of the weight of liquid resin consumed, then also, the variation was of a very small of percentage, which is ignorable. As per the reconciliation statement submitted by the Appellant the actual short, which is reproduced below, the shoratge was only 36.13 MT. Working Notes M1 M2 Total Liquid produced Liquid produced during 01.06.2007-05.05-2008 10970.315 2658.435 13628.75* * Out of the total liquid a part is used for captive consumption by Allied Resins in Rampur, a part is transferred to Aarem facility in Rampur and a part is transferred to Hide Road facility Transfer of liquid Aarem facility at Rampur (As per Excise Dept) Allied facility (Captive Consumption) [As per books] Total Liquid transferred to Rampur 2106.315 1862.2 3967.515 Total Powder should have been produced 3967.515 * 55% 2182.13 MT Sale of go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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