9911796707
TMI Blog1997 (7) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... uary, 1991 under Rule 57-I of the Central Excise Rules read with Section 11A of the Central Excise Rules. He has also imposed a penalty of Rs. 25,000/- under Rule 57Q of Central Excise Rules, 1944. It is alleged in the show cause notice dated 9-4-1992 issued to the appellants contravention of Rule 57D(1) of Central Excise Rules in as much as they did not use 16086.92 MT of chemicals falling under Chapter sub-heading 2806.90 of Central Excise Tariff, 1985 in the manufacture of final product for which it was brought in the factory and took credit on the aforesaid quantity of gypsum. On the plea that this quantity had been lost in the process for the period May, 1987 to April, 1990 and October, 1990 to February, 1991. It has been stated that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also contended by the appellant that Rule 56A(3)(iv) of Central Excise Rules, 1944 provides that any waste generated out of the material brought under Rule 56A can only be removed after payment of duty or where the waste is unfit for further use it can be destroyed in the presence of proper officer and duty payable thereon shall be remitted. In respect of visible losses, Rule 56A allows utilisation of credit if it is not removed from the factory. It is stated that since in the case of unvisible losses there is no question of any removal from the factory, therefore, they cannot be disallowed to utilise the Modvat credit on gypsum. The moisture loss in gypsum is unvisible, therefore, the question of removal from factory does not arise. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the Collector has gone beyond the period of six months as the allegation of loss that occurred in the kutcha pit which was not originally in the show cause notice or about the fact of loss occurring during the month of manufacture. He also submits that there was no allegation of any mis-statement in the show cause notice and duty confirmed is for the period 1987 upto 1990 and the show cause notice is dated 9-4-1992 and hence the demands are clearly time-barred. He submits that the process loss is invisible during the course of manufacture and hence such process loss is admissible under Rule 57D of Central Excise Rules. He submits that the Tribunal in similar cases have granted the benefit as in the case of Rishi Iron Steel Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t specifically brings out the nature of loss on 16086.92 MT of gypsum was not used in or in relation to the manufacture of the cement. The ld. Collector has gone beyond the allegations made out in the show cause notice. The proceedings are liable to be quashed on this ground itself. Further the proceedings are liable to be set aside on the time-bar as the show cause notice does not allege suppression, wilful mis-statement or mis-representation under the proviso to Section 11A of the Act. The demand has been raised on 9-4-1992 for the period 1987 to June 1990. The Collector has not given any finding as to how the proviso to Section 11A of Central Excise Act could be invoked in the present case for the larger period. The details have been fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf clarifies that Credit of specified duty allowed in respect of any inputs shall not be denied or varied on the ground that part of the inputs is contained in any waste, refuse, or by-product arising during the manufacture of the final product, whether or not such waste, refuse or by-product is exempt from the whole of the duty of excise leviable thereon or is chargeable to nil rate of duty or is not specified as a final product under Rule 57A. Ld. Counsel has also relied on the judgment which clearly brings out the facts and circumstances of the case of Rishi Iron Steel Ltd. cited supra, wherein the Tribunal held that burning losses are technologically unavoidable in the process of manufacture of the final product after the inputs rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
