9911796707
TMI Blog1993 (6) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... ing proforma credit under Rule 56A. The RT-12 returns filed by the appellants showed that during the period November, 1982 to May, 1985 out of a quantity of 1098.710 MTs of Ammonium Nitrate Flakes manufactured out of Ammonium Nitrate melt, the appellants had despatched 457.100 MTs of Ammonium Nitrate Flakes after payment of duty to their factory at Hyderabad. Since the remaining quantity of Ammonium Nitrate Flakes was neither shown in the RG-1 nor reflected in RT-12 returns filed by the appellants, the Department felt that 641.610 MTs of Ammonium Nitrate Flakes had been clandestinely removed without payment of duty. The appellants were, therefore, served with a show cause notice dated 19-11-1987 alleging that they had evaded duty amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical Control there could be no allegation of suppression and accordingly the demand issued beyond the normal period of limitation was time barred. However, the Collector rejected all the submissions made by the appellants and held that 641.610 MTs of Ammonium Nitrate Flakes had been cleared by the appellants clandestinely and confirmed the demand for duty amounting to Rs. 2,22,089.72 under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A of the Central Excises and Salt Act, 1944. He also imposed a penalty of Rs. 1,00,000/- on the appellants and Rule 173Q of the Central Excise Rules, 1944. 3. On behalf of the appellants the learned Advocate Shri S.N. Sinha Mahapatra appeared before us. He stated that since 1984 the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which had not been referred to by the Collector even though the appellants had repeatedly requested that they should be permitted to account for the disputed goods with reference to their own records. He stated that the goods were declared as exempted in terms of Notification No. 118/75 in the classification lists filed from time to time which were duly approved. He stated that the case against the appellants had been made by the Department entirely on the basis of certain figures in the appellants private records but they had deliberately chosen not to refer to the figures in these records relating to the quantity of the disputed goods used for captive consumption. He contended that the demand confirmed by invoking the extended period ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of Ammonium Nitrate Melt into Flakes does not amount to manufacture within the meaning of Section 2(f) of Central Excises and Salt Act, 1944. (ii) The confirmation of the demand by invoking the extended period on the ground of suppression and clandestine removal was illegal since the appellants factory was under physical control and the goods in question were declared as exempted in terms of Notification No. 118/75 in the classification lists which were duly approved and also for the reason that the Ammonium Nitrate Flakes consumed captively were fully accounted for in the appellants private records. 6. It is an admitted fact that a part of the Ammonium Nitrate Flakes produced out of the Ammonium Nitrate melt received from M/s. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nitrate Flakes was used captively. They have also claimed that they had failed to include the quantity of Ammonium Nitrate Flakes meant for captive use in the RG-1 and RT-12 on account of the bona fide belief that goods which were exempted from duty in terms of Notification No. 118/75 and fully accounted for in their private records were not required to be entered in RG-1 and RT-12. The appellants have also stated that the case against them was made by the Department on the basis of the figures of total production of Ammonium Nitrate Flakes and the quantity of such goods despatched to their Hyderabad factory available in their private records but the adjudicating authority had not cared to refer to these records which were in his custody to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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