2008 (7) TMI 811 - AT - Central Excise

Summary

Issues:
Appeal against duty demand and penalty imposed by the original authority based on inputs sent for processing to job worker, disagreement with Commissioner (Appeals) decision, reconciliation of processed goods, by-products, and waste, evidence of duty payment on waste and by-products, validity of denial of credit on entire quantity of inputs sent for processing, remand for fresh consideration by original authority.

Analysis:
The appeal involved a dispute regarding duty demand and penalty imposed by the original authority on inputs sent for processing to a job worker. The appellant, a manufacturer of bulk drugs, reversed 10% value of the inputs towards credit taken before sending them for processing. The original authority contended that the appellant failed to return all processed goods, including certain by-products and waste, leading to the duty demand and penalty. The Commissioner (Appeals) upheld the original authority's decision, prompting the appeal.

During the hearing, the appellant's advocate argued that the demand was raised without considering relevant facts and laws. The appellant claimed to have received back the entire quantity of processed goods, with any waste or by-products cleared by the job worker on payment of appropriate duty. The Department, represented by the DR, argued that the appellant should have returned all processed goods, by-products, and waste to regularize the credit availed. The Department insisted that evidence of duty payment on waste and by-products should have been provided to the original authority.

The Tribunal carefully considered both sides' submissions and found that the appellant was obligated to account for the entire inputs sent for processing in the form of processed goods, by-products, and waste. The Tribunal noted that the appellant had been producing evidence in stages, with new evidence presented before the Tribunal. The Tribunal refrained from verifying the evidence's accuracy but emphasized the importance of reconciliation and evidence submission to the original authority.

Ultimately, the Tribunal set aside the orders of the Commissioner (Appeals) and the original authority, remanding the matter for fresh consideration. The appellant was directed to produce a reconciliation of inputs, including details of processed goods, by-products, and waste, supported by norms. The original authority was instructed to reconcile and demand duty for unaccounted processed goods, by-products, and waste, based on evidence provided by the appellant. The decision on penalty was also left to the original authority's discretion, with a deadline set for resolution.

In conclusion, the appeal was allowed by way of remand, emphasizing the need for detailed reconciliation and evidence submission for the original authority's reconsideration within the specified timeframe.