9911796707
TMI Blog1997 (1) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-1993 was for recovery of the duty on wrapping paper captively consumed for wrapping other types of paper for the period 1988-89 to 1992-93. He pleaded that the learned lower authority has denied the appellants out of the benefit of Notification 217/86 in respect of this paper as according to him the value of this wrapping paper was not included for the purpose of arriving at the assessable value of the paper which was wrapped in the same and inasmuch as the value of this wrapping paper was not included in the total price of the paper charged and since no duty therefore in respect of this paper came to be paid at the time of clearance of the paper wrapped in the same, the benefit of Notification 217/86 should not be allowed. In this connection he referred us to show cause notice and the allegations contained therein and also to the reasoning of the learned lower authority for demanding duty. He pleaded that there was practice in the paper industry to arrive at the notional rate of the paper cleared in the wrapped condition and the manner in which the same was arrived could be seen from the copy of the letter No. 347/PMA dated 30th May, 1978 from the Indian Paper Makers Association ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the use of the wrapping paper captively and these proceedings had been dropped ultimately. On appeal, the Collector (Appeals) held that in view of Rule 57D(2) the appellants were eligible to take Modvat credit on the input which was used for manufacture of wrapping paper which ultimately was used in wrapping other papers cleared from the factory. On going through the facts he fairly conceding that the issue in that case was in regard to the benefit of input credit in respect of the inputs used in the manufacture of wrapping paper. He however pointed out that the context was regarding availment of the benefit of Notification 217/86. He also urged that the appellants had all along filed the price lists as well as the classification lists which had been approved from time to time and these approvals, he has pleaded, would not have been given in a mechanical manner and would have been granted after due verification. He pleaded in this background no mala fide can be attributed to the appellants and the longer period of limitation could not be invoked. 3. In this connection he referred us to the order of the Tribunal bearing No. 682/96, dated 6-5-1996, filed in the paper book. He ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive invoices and that it would follow that the weight of the wrapper was included therein as otherwise the manufacturer would have no means of recovering the cost of the wrapper. This contention is not acceptable. What is relevant here is whether appropriate duty has been paid on the said wrapper. Billing for weight shown on the respective invoices does not imply that the weight of the mill wrapper is included or that proper duty had been paid on it. It is observed that quantity, value and duty particulars of the mill wrappers were not separately shown on the duty paying documents. In the absence of such a vital evidence, I am not inclined to accept the contention of Bhadrachalam Paper that weight of wrapper was included in the weight shown on the duty paying documents which has been arrived at by them as per a formula based on certain assumptions and presumptions. 5. In regard to limitations, he again referred us to the order of the learned lower authority. Detailed reasoning has been given bringing out the fact that the appellant had not brought to the notice of the authorities the manner in which they have arrived at the notional weight. As per the method adopted it was onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notional weight of the paper cleared in reams as declared in the invoices. In this view of the matter we find prima facie the learned lower authority s findings are sustainable in law. A plea has been taken that some earlier proceedings were drawn in respect of the eligibility to Modvat credit in respect of the inputs used in the manufacture of wrapping paper when the wrapping paper was cleared duty-free under Notification 217/86 and that once the issue has been decided in their favour the same issue cannot be reopened. We observe that the issue in that case and the present case are totally different and reference to Notification 217/86 is only in the context of eligibility of Modvat credit for inputs when the paper was cleared duty-free under exemption Notification. Here the question before us is whether the requirements of Notification 217/86 in respected of the paper in question had been satisfied. The condition to be satisfied under Notification 217/86 is in terms of the Explanation in the operative part of the Notification which is reproduced below : Explanation - For the purpose of this notification, `inputs does not include- (i) machines, machinery, plant, equipment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared the method adopted for arriving at the notional weight in the price list or in the classification and it is not their case that they were endorsing the same on all the gate passes relating to the clearance which had been made during the relevant time. In fact their plea is that they endorsed the formula on 2 gate passes and that cannot form the basis for raising the demand for the entire period. What follows prima facie is therefore that the appellants had not come on record as to the method adopted for notional weight they were adopting nor they have come on record with evidence which had been contemporaneously maintained by them for their purpose to show that the wrapper weight had been taken into reckoning while arriving at the notional weight of paper in reams. The appellants therefore, we hold, had prima facie withheld the information from the Department when they fully well knew the practice in trade was to take the weight of the wrapping paper into consideration. There is no explanation from them for not doing so and we hold that prima facie this was done with intention to evade payment of duty and to avail the benefit of Notification 217/86. 9. We observe that pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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