2011 (3) TMI 1604 - AT - Central Excise

Summary

Issues Involved:
1. Alleged suppression of production and clandestine removal of aerated water bottles.
2. Denial of Cenvat credit on crates.
3. Mis-match between the quantity of concentrate used and production recorded.
4. Mis-match between electricity consumption and production accounted.
5. Alleged excess use of crown corks.

Summary:

1. Alleged Suppression of Production and Clandestine Removal:

All appeals involve a common issue alleging suppression of production and clandestine removal of aerated water bottles. The demands were based on discrepancies in the consumption of crown corks, concentrate, and electricity. The Tribunal noted that the department issued separate show-cause notices based on each parameter without integrating the investigations, leading to overlapping demands. The Tribunal found that the statements recorded from the appellants' representatives were not provided to them, and there was no clear decision on the treatment of 200 ml bottles as 300 ml bottles. The Tribunal remanded the matter for fresh consideration, directing the Commissioner to verify the electricity consumption figures and provide copies of the relied-upon statements to the appellants.

2. Denial of Cenvat Credit on Crates:

In Appeal No.118/06, there was an issue relating to the denial of credit amounting to Rs. 1.63 Crores on crates. The appellants argued that the crates should be treated as packing materials and are durable and returnable in nature. They claimed that the proportionate cost of the crates was included in the cost of aerated water bottles. The Tribunal found that this claim was made for the first time before them and required verification. The matter was remanded for fresh consideration.

3. Mis-match Between Quantity of Concentrate Used and Production Recorded:

The demand was based on a mis-match between the quantity of concentrate consumed and the production recorded in RG I Account. The Commissioner relied on the input-output ratio from 1999-2000 to estimate production and found shortages, leading to duty demands. The appellants argued that different products required different percentages of concentrate, and the average from 1999-2000 was wrongly adopted for other years. The Tribunal found that the Commissioner linked her findings to an earlier order and adopted different yardsticks for confirming the demand. The matter was remanded for fresh consideration.

4. Mis-match Between Electricity Consumption and Production Accounted:

The demand was based on a mis-match between electricity consumption and production accounted by the appellant unit. The appellants argued that the demand was made on presumption and that the Commissioner did not consider the electricity consumed using DG Sets. The Tribunal noted wide variations between the electricity figures in the show-cause notice and the bills provided by the appellants. The matter was remanded for verification with the Electricity Board and fresh consideration.

5. Alleged Excess Use of Crown Corks:

The demand was based on alleged excess use of crown corks, with the appellants arguing that the corks were also used for 200 ml bottles and that wastage occurred during manufacturing. The Tribunal found that the show-cause notice and the order-in-original did not clearly address the appellants' claims regarding the use of crown corks. The matter was remanded for fresh consideration, with the Commissioner directed to provide copies of the relied-upon statements to the appellants.

Conclusion:

The Tribunal set aside the impugned orders and remanded the matters for fresh consideration, directing the appellants to make further submissions within 45 days and the Commissioner to conduct necessary verifications and provide copies of relied-upon statements. The denovo proceedings should be completed expeditiously, preferably within six months.