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2008 (3) TMI 587 - AT - Central ExciseSSI Exemption - Brand name of another - Demand - Cenvat/Modvat - Returned goods - Evidence - Computer printouts
Issues Involved:
1. Eligibility for concessional rate of duty under Notification No. 5/99. 2. Allegations of clandestine clearances without payment of duty. 3. Irregular availment of Cenvat credit. 4. Demand based on data found in CPU. 5. Demand based on weighment variance. 6. Demand based on physical verification of clinker. 7. Demand based on consumption of inputs and cost audit analysis. 8. Imposition of penalties. Detailed Analysis: I. Eligibility for Concessional Rate of Duty: The Commissioner concluded that the appellants were entitled to the concessional rate of duty for mini cement plants based on their installed capacity. The installed capacity was determined to be less than 900 TPD, supported by a certificate from the Commissioner of Industries, Hyderabad. The Tribunal upheld this decision, dismissing the Revenue's appeal on this point, noting that the certificate's date did not invalidate its relevance for the disputed period. II. Allegations of Clandestine Clearances: The Commissioner confirmed a duty demand of Rs. 88,05,408/- for illicit clearances of cement and clinker, based on discrepancies in production records and data from a CPU. However, the Tribunal found that the evidence from the CPU did not meet the requirements of Section 36(B) of the Central Excise Act, 1944, and set aside the demand of Rs. 31,15,975/-. The Tribunal also set aside demands related to second sales and supplies to Aurobindo Pharma, citing insufficient evidence of clandestine removal. III. Irregular Availment of Cenvat Credit: The Commissioner confirmed demands for irregular Cenvat credit availed on returned cement and grinding media. However, the Tribunal set aside the demand of Rs. 50,348/- for returned cement used within the factory and the demand of Rs. 10,52,000/- for grinding media, noting that the supplier had paid duty and the goods were received. The demand of Rs. 5,75,988/- for scrapped grinding media was also set aside due to lack of evidence. IV. Demand Based on Data Found in CPU: The Commissioner confirmed demands based on data from a CPU recovered from Modern Plastic Corporation. The Tribunal found that the evidence did not meet the legal standards for admissibility under Section 36(B) of the Central Excise Act, 1944, and set aside the demand of Rs. 31,15,975/-. V. Demand Based on Weighment Variance: The Commissioner confirmed a demand of Rs. 8,554/- based on a 0.002% discrepancy in weighment, which the Tribunal upheld, finding no strong reason to interfere with the Commissioner's order. VI. Demand Based on Physical Verification of Clinker: The Commissioner dropped a demand of Rs. 33,22,755/- based on visual estimation of clinker shortage. The Tribunal upheld this decision, noting that visual estimates without corroborative evidence could not justify the demand. VII. Demand Based on Consumption of Inputs and Cost Audit Analysis: The Commissioner dropped a demand of Rs. 1,01,11,241/- based on theoretical calculations of input consumption and cost audit analysis. The Tribunal upheld this decision, agreeing that the demand was based on assumptions and lacked concrete evidence. VIII. Imposition of Penalties: The Commissioner imposed penalties on various individuals and the company. However, the Tribunal set aside all penalties, noting that most demands were not substantiated. The Tribunal also upheld the decision to drop the penalty against Shri K.S. Ram Rao, M.D. of Torus India, as duty had been paid on the grinding media. Conclusion: The Tribunal upheld the Commissioner's decision to grant the benefit of Notification No. 5/99 and dismissed the Revenue's appeal on this issue. It set aside several demands related to clandestine clearances, irregular Cenvat credit, and second sales due to insufficient evidence. The Tribunal upheld a small demand based on weighment variance and confirmed the dropping of demands based on clinker shortage and theoretical calculations. All penalties imposed were set aside.
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