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TMI Blog2001 (9) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... n as forcol. On verification of the stocks, there was no difference found in the available finished stocks as compared to the recorded balances in their RG 1 register. However, in the stock of raw material, there was a shortage of 2429 kgs. of PVC resin and excess of 3572 kgs. of PVC chemical and 64825 kgs. of calcium carbonate as against the entries made in their statutory accounts. With regard to the shortage of 2429 kgs. of PVC resin, the party debited Rs. 20,464/- in their RG 23A Part-II. 2. During the search, the Officers also recovered a miscellaneous file maintained as private record by Shri Sachin the Machine Operator of the factory showing consumption of PVC Resin, Calcium Carbonate and PVC Chemical and number of PVC pipes manufactured in a particular shift. These records contained the particulars only for a period of seven days viz., from 27-12-95 to 2-1-96. As per these records, the party was using nearly 60 kgs. of calcium carbonate (forcol) for every 100 kgs. of PVC resin. The statement of Shri Sachin was recorded who deposed that in addition to the above; 7 kgs. of PVC Chemical had also been used for the purpose of PVC compound which was further used to manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erally shown to have been consumed for every 100 kgs. PVC resin. It is alleged that the party was under recording the consumption of Forcol to the extent of 45 kgs. per 100 kgs. of PVC Resin and thus the assessee suppressed the production of PVC pipes and cleared the same without payment of Central Excise duty. It is stated that during the physical verification 64,825 kgs. of calcium carbonate was found in excess. Thereby, corroborating the above modus operandi. It is alleged that they were engaged in the fabrication of records right from the stage of procurement of raw material upto the stage of clearance of finished goods. It is stated that as per the details annexed with the show cause notice, during the period, 1994-95, the quantity of PVC pipes manufactured as per the private records was in excess of 17,39,020 kgs. as against the actual quantity of 12,36,630 kgs. shown in the statutory records. Similarly, during 1995-96, the actual quantity produced is 3,22,407.30 kgs. Thus, during this period they have suppressed the production of 5,02,390 kgs. of the finished goods. It is stated that as per the physical verification, the average weight of one PVC pipe of size 110/16 is 10.57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2 lakhs and Rs. 1 lakh respectively on Shri J.K. Agarwal and Shri Anoop Chand Jain under Rule 209A. 7. The present appeals are against the above order of the Commissioner. We have heard Shri A.K. Jain, Advocate for the appellants and Shri Mewa Singh, SDR for the respondents. We have considered the submissions made before us. As could be seen from the details given above that the main charge of the Department against the appellants, M/s. Super Pipes (P) Ltd. is that they consumed 60 kgs. of Forcol (calcium carbonate) for consumption of every 100 kgs. PVC resin as against 15 kgs. of calcium carbonate as reflected in their statutory records. This averment of the department is solely based on the entries in the private record of the party for only seven days viz., from 27-12-95 to 2-1-96, the particulars of which are appended in para 3 above. The department has further relied on the statement of Shri Sachin, the Machine Operator of the factory who has in fact himself maintained the said private record. Interestingly the department has no dispute with the quantity of PVC resin consumed by the party as reflected in their statutory records but has inflated the figures of consumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore not accepted by the concerned department. They further stated that they were using Kolsite make plant to manufacture their product. This plant was incapable to manufacture PVC pipes having 60% forcol in the raw material. This could even be enquired from M/s. Kabra Extrusion Technik Ltd., Bombay - the manufacturers of the machine. 9. The party was asked by the department to produce copies of purchase orders in respect of the rigid pipes and reports of various test agencies and the specifications laid down in the BIS i.e., IS 4985. On verification of these documents it was found that the test agencies had confirmed that the goods were as per purchase orders and as per the ISI specifications. They also produced the report of the Supreme Technical Authority on the Plastic Industry under the Ministry of Chemical Fertilisers, Govt. of India who had opined, In the testing laboratory and independent studies...... it is found that when the proportion of CaCO3 is raised from 7 to 11 parts, the pipe passes hydraulic, impact and reversion tests when tested as per IS : 4985-1988. Upto 15 parts of CaCO3 the test results show the same trend as for 11 parts. When the CaCO3 loading is 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y cleared on payment of duty during these two years and has confirmed the differential duty of Rs. 77.8 lakhs on the appellants apart from ordering them to suffer penalty of equivalent amount. We find this approach of the Commissioner irrational and without any basis. There is no investigation conducted much less there is an averment as to the source from which such huge quantity of forcol was procured, how the payment for this was made and how it could have been used for the extra production of PVC pipes on the existing machinery of the party. There is also no finding as to how and to whom the goods so produced could have been sold since it is a definite averment of the appellants before him that the PVC pipes could be sold only to the Agencies of the State Government for the Public Civil Engineering works and there is no rebuttal of this averment of the party in the order of the Commissioner. On the argument resorted to by the Commissioner in his order, there should have been a shortage of forcol but on the contrary, there is found an excess of 64,825 kgs. of this item on verification of stock. This anomaly is not analysed in the order. 12. Furthermore, in the show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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