TMI Blog2003 (1) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... ng under the Modvat scheme, credit of duty paid on the said granules by the manufacturers were availed by them after following the due procedure as envisaged under the Modvat rules. 3. The department issued the appellant Show Cause Notices alleging that they had wrongly availed the Modvat credit in respect of the HDPE granules received by them inasmuch as the said granules were not actually used by them in the manufacture of HDPE pipes. The above allegations were based upon the fact that as per specifications of DOT contracts, only a particular grade of HDPE granules could be used for the manufacture of HDPE pipes. As such notice sought to disallow the Modvat credit availed by the appellant and imposed personal penalty upon them. The said Show Cause Notice was adjudicated by the Commissioner vide which he confirmed the demand of duty against manufacturers along with imposition of penalties upon them and imposition of penalties upon the proprietor of the manufacturing units. 4. Shri S.K. Bagaria, ld. Adv., appearing for the appellants submits that the department's allegations and the findings of the Commissioner are in the realm of assumptions and presumptions and are based upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " from M/s. Reliance Industries and the department has also accepted that this was one of the grades suitable for manufacture of HDPE pipes according to DOT specifications. He submits that the manufacturer was not to be benefited by bringing other types of grades from Reliance Industries or other manufacturers inasmuch as both the types of grades of granules would have been duty paid having been manufactured by primary manufacturer of granules, who would have cleared the same on payment of duty. He submits that there was no dispute about the quality of the HDPE pipes by the Department of Telecommunications who conducted various tests on the same before accepting the pipes. In any case the department has not established that the granules received by them were non-duty paid and how the appellant would have been benefited if instead of a particular grade of granule i.e. 'Relene E41003' which is also manufactured by Reliance Industries along with other grades, the appellant received other grades which are also duty paid. 6. Shri Bagaria further submits that the reasoning adopted by the Commissioner is also biased inasmuch as he has not relied upon the entire context of the certificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations depending upon the blend composition in order to meet the final product performance requirement. It further stated that its customers based on their applications and practical trials of blending of the grade developed their own preference of grades to suit characteristics and performance of end-product. Letter dated 8-3-99 of HPCL was also on the identical grounds. 9. Shri Bagaria submits that the Commissioner has picked up one or two lines from the said letters and have not gone by the entire context of the letter thus leading to erred findings. He submits that DOT's specification clearly permit use of any other standard equivalent grade and the appellants have used the same and in the absence of any evidence to the contrary the findings of the authorities below, based upon the unwarranted and unsustainable technical specifications cannot be justified. 10. Shri Bagaria also draws support from letter dated 1-9-2000 of CIPET's certifying that it is possible to produce HDPE material for pipe purposes conforming to DOT's specification by blending/mixing of different grades of HDPE raw materials. As such he submits that there is ample evidence on record to show that with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the contentions of the ld. Adv. that the entire context of the said clarifications given by the primary manufacturers have not been taken into account by the adjudicating authority. Whereas in most of the clarifications, manufacturers have stated that a particular type of a grade is most suited for manufacture of HDPE pipes of DOT's specifications, there is nothing to suggest in their letters that the pipes in question cannot be made from other grades. In fact the said clarification go one step ahead and state that with the proper mixing and blending of other types of grades of granules, desired result can be attained. It is also seen that CIPET vide its letter dated 15-2-2002 addressed to one of the appellants herein i.e. M/s. Plastic Concern has stated that - "it is possible to produce HDPE material for pipe purpose conforming DOT Specification (G/CDS-05/01 Dec. 94) by blending/mixing of different grades of virgin HDPE raw materials". We also note that apart from relying upon technical aspect, the Revenue has not produced any evidence on record showing disposal of the acquired granules or purchase of any other granules from the market so as to arrive at an adverse finding ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Institute of Plastics Engineering and Technology, after going through the various evidences which must have been produced by the industry in which they have said that by blending/mixing of different grades of virgin HDPE raw materials, it is possible to produce HDPE material for pipe purpose as per DOT specifications. It was, in this background, the clarification was given by the Central Institute of Plastics Engineering and Technology, Lucknow and this clarification has got relevance for deciding the issue. Further, the appellants have submitted extract of RT-23A register along with their monthly RT-12 Returns, therefore the demand is hit by limitation and is time-barred. Moreover, all the transactions were genuine and not fictitious and Modvat credit has been taken on the quantity of inputs purchased by them and received in the factory. We, therefore, allow the appeals with consequential reliefs, if any, by setting aside the impugned order. Ordered accordingly. 16. As the matter stands decided by the above decision of the Tribunal and in the light of the discussion in the preceding paragraphs, we find no reason to uphold the impugned order of the Commissioner. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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