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TMI Blog2001 (9) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Rules. 2. For appreciating the facts and the legal position in the present case, it is necessary to go through the factual position which resulted in origination of the present case against the appellants. M/s. Faridabad Metal Udyog Pvt. Ltd. are engaged in the manufacture of LPG cylinders falling under Chapter Heading 7311.0. The appellants during the relevant period were availing the benefit of Modvat credit on the inputs used in the manufacture of LPG cylinders. The appellants factory was visited by Central Excise (Prev.), Faridabad officers on 3-12-1996, who conducted various checks and verifications. As a result of physical stock taking of the raw materials, it was found that the same were short than the recorded balance in their Modvat register. Shri P.K. Jain, MD of the company, who was present at the time of visit of the officers in his statement dt. 3-12-1996 admitted the shortages of the inputs, but could not explain the reasons for the same. He voluntarily undertook to pay duty of Rs. 3,30,829.00 involved in the inputs found short as against the recorded balance. However, this case of shortages found on the day of visit of the officers is not the subject-ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een recording the waste and scrap so produced during the manufacture in their statutory records and submitting the returns with their jurisdictional Central Excise authorities. No objection has ever been raised by the authorities. As such he submits that the demand is also barred by limitation. 6. Shri Mewa Singh, ld. SDR appearing for the Revenue submits that the findings of the authorities below that 19.19 kgs. of inputs are required for manufacture of LPG cylinders have been taken from the appellants own records. The agreement between the appellant and the oil companies provide for consumption of 20 to 20.4 kgs. of steel per cylinder including the scrap and rejection. The appellants have already been given the benefit of 5% waste and scrap. He submits that the fact that raw material was found short on the day of visit of the central excise officers corroborates the stand of the Revenue that the appellants have not been utilising the entire quantity of their inputs in the manfacture of their final product, but have been disposing them in a manner other than for what they were brought in. As regards limitation he relies upon the findings of the adjudicating authority and prays ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty. This having not been done by them, we find no substance in the above submission of the appellant. 8. The mere fact that the cylinders are being produced by the appellants under the control of BIS and under the Explosives Act as per the specifications of various oil companies does not further the appellants case inasmuch as the dispute is not in respect of the finally manufactured LPG cylinders by the appellants, but the same is as regards the quantum of the inputs used by the appellants in the manufacture of the said LPG cylinders. The ld. Additional Commissioner has passed a very detailed order taking into account the total consumption and production figures of the appellant during the relevant period and discussing them threadbare in Paras 18 and 19 of the impugned order. She has also taken into account that during the period 1991-92 the consumption of HR sheets, even after giving allowance of 5% rejection was less than 19.850 kgs. per cylinder. Reliance has also been placed upon the statement of Shri P.K. Jain given at the time of visit of the officers, which statement has not been retracted by them. She has also taken note of the fact that production figure of LPG cyli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in their letter dt. 13-11-1997 the steel consumed was 3074.992 tons whereas in the balance sheet is shown as 4208.986 tons, the scrap generated is 813.046 and the net steel consumed is shown as 261.946. One would assume that the net steel plus the scrap generated would be equal to the steel consumed. However, this is not the case, almost 2000 mts. is unaccounted for. From the RT-12 returns for that year 812.848 mt. of scrap was generated. Whereas as per their statement in their letter dt. 13-11-1997 as reproduced above does not tally. It is emphasized that the production figures submitted to the department on which duty is paid must tally with the production figures in the balance sheet. The whole principle of record based control is that an officer is not sitting in the factory to ensure that there has been no illegal clearance but in case the assessee s figures do not tally, then it can be assumed that there is illegal removal in some way or the other. Otherwise the entire record based removal is meaningless. The assessee s statement therefore that Shri P.K. Jain s statement is the sole basis of the SCN and their written record is perfectly in order is not correct. Apart from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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