2003 (8) TMI 449 - AT - Central Excise

Summary

Issues:
Challenge to demand of duty on slag cement and imposition of penalty under Section 11AC of the Act.

Analysis:
1. The Appellant, M/s. Khandelwal Cement Ltd., contested the duty demand on slag cement and the penalty imposed under Section 11AC of the Act. The contention was based on the purchase of slag for manufacturing slag cement without payment of duty. The Appellant argued that they had proper records and had not suppressed production or conducted clandestine removal. They highlighted discrepancies in statements provided by their General Manager regarding the use of slag, emphasizing that they were not licensed to manufacture slag cement. The Appellant also referred to Board Circulars and declarations to support their case, asserting no duty liability for the slag consumed.

2. The Appellant further argued that the Revenue failed to provide concrete evidence of clandestine removal, emphasizing the need for positive evidence to establish such claims. They cited a relevant case law to support their stance on the burden of proof required by the Department in cases of clandestine removal. Additionally, they contended that the extended period for demanding duty could not be invoked as the Department was aware of all relevant facts.

3. In response, the Senior Departmental Representative countered the Appellant's claims by pointing out the significant quantity of slag purchased by the Appellant from Malvika Steel Ltd. The Department highlighted discrepancies in the Appellant's records regarding the production and clearance of slag cement, emphasizing the absence of proper documentation supporting the manufacturing and sale of slag cement. The Department also questioned the Appellant's declaration under Rule 173B, arguing that it did not conclusively prove the manufacture of slag cement.

4. The Tribunal considered both parties' submissions and found that the Appellant had indeed purchased slag from various sources, including Malvika Steel Industries. Despite the Appellant's arguments about not having a license for manufacturing slag cement, the Tribunal noted the lack of evidence in the Appellant's records to support the claim that slag cement was accounted for as ordinary Portland cement. The Tribunal agreed with the Adjudicating Authority's findings that the Appellant's records lacked entries for slag as an input and did not avail Modvat credit for duty paid on slag. The Tribunal upheld the impugned order, rejecting the Appeal based on the lack of evidence supporting the Appellant's claims and the discrepancies in their records regarding the production and clearance of slag cement.