TMI Blog2000 (12) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Tariff Act, 1985. 2. The appellants are engaged in manufacturing different grades of lubricating oils and greases (sub-heading 2710.90), obtaining base oils under bond meant for use as inputs on which they took Modvat credit of duty paid at the time of clearances from their bonded storage tanks located within the manufacturing premises. 3. A show cause notice dated 15-5-1998 was issued by the respondent on the alleged ground that there was loss of inputs to the order of 14% to 16% of the tank discharge quantity. The loss at various intermediate stages starting from tank discharge through pipeline up to reaction kettle and attributed to various factors viz., spillage, pipeline losses, handling losses, evaporation losses, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended that the show cause notice in question was barred by limitation. 5. The Commissioner of Central Excise, Calcutta-I however, did not find favour with the submission made by the appellant and vide his impugned order confirmed the demand of duty of Rs. 43,68,000/- by rejecting the Modvat credit irregularly availed by the appellants on the oil equivalent to the oil lost and also imposed penalty of an identical amount under the provision of Rule 57I(4) along with confirmation of interest under the provision of Rule 57-I(5). 6. We have heard Dr. Debi Pal, ld. Sr. Advocate, appearing for the appellant. It has been strongly argued that the Revenue has denied the benefit of the Modvat credit by adopting high percentage of wastage of base ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was given in the context of unamended Rule 57D. He submits that Rule 57D was amended in 1993 and the expression 'arising during the manufacture of the final product' appearing in earlier Rule 57D was changed to 'in or in relation to the manufacture of the final product'. As such he submits that the provisions of Rule 57D were given wider scope and the inputs which were lost or became waste while being used in or in relation to the manufacture of the final product was also covered by Rule 57D. In this connection he refers to the Hon'ble Supreme Court's decision in the case of Rajasthan State Chemicals - 1991 (55) E.L.T. 444 (S.C.) wherein it has been held that the process of handling/lifting/pumping/transfer/transportation of raw material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing reflected in RG 23 records is not justifiable inasmuch as wastage cannot be recorded there. He relies upon the Supreme Court's decision reported in 1995 (75) E.L.T. 721 (S.C.). 10. We have also heard Shri R.K. Roy, ld. JDR, for the Revenue who reiterates the reasoning of the adjudicating authority and submits that there being an earlier decision of the Tribunal in the case of Guljag Chemicals (P) Ltd., Rule 57D must be held as not covering the losses by spillage or evaporation. He, further, submits that adjudicating authority has observed that as the appellants were not reflecting the wastage in their records, non-mentioning of the same would attribute suppression to the appellant justifying invocation of longer period of limitation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fely concluded as having been occurred 'in or in relation to the manufacture of the final product'. As such we hold that whatever wastage had occurred after the oil was discharged from the tank discharge would be covered by the provisions of Rule 57D. 12. In any case we find that the appellants had agitated before the adjudicating authority that the wastage was not to the tune of 14 - 15% but was only to the extent of 1%. For the said purposes they placed on record the statements based upon their statutory records, which has been dismissed lightly by the adjudicating authority by observing that the same were not substantiated. It is observed that the appellants having placed figures before the adjudicating authority, if the adjudicating a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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