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TMI Blog2002 (8) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... Brief facts of the case are that the appellants are engaged in the manufacture of PVC pipes falling under Chapter 3917.00 and are registered with Central Excise. On 9-3-95 the officers of the department visited the Unit and found that some PVC pipes have been removed under their factory JOB GATE PASS without payment of duty. It was also found that no entries had been posted in the statutory register after 5-3-1995. Physical verification of the stock of finished goods was carried out by the officers on 10-3-1995 and 17-3-1995 in the presence of Shri R. Venugopal, Dy. Manager of the appellants and a statement showing physical stock of PVC pipes, the difference in the stock when compared with the RG-1 register was prepared. It was found that there were 2122 numbers of PVC pipes in excess and 592 PVC pipes of various descriptions were found to be short of RG1 stock. The value of the goods found in excess in RG1 stock was arrived at Rs. 3,89,620/- on the basis of the price list of the assessee and the duty thereon worked out to Rs. 77,925/-. The value of shortages noticed was Rs. 1,08,717/- and the duty worked out on that was Rs. 21,743/-. The records also revealed that the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statement of Shri R. Venugopal, Dy. Manager of the appellants which was recorded on 21-3-95 and 21-4-95 and the whole evidence based is on this statement. He further submitted that pipes have been removed to FPL for lack of space in their factory and those pipes have been removed from there on payment of duty. As regards scrap, he submitted that the appellants had applied for permission and their request was rejected. He further submitted that PVC pipes are of various sizes and if one is set off against the other there would be no shortage or excess. Affidavits were also filed in this case but they have not been considered by the adjudicating authority. Allegation of the department that they have purchased raw materials without documents and manufactured and cleared goods clandestinely without payment of duty is not based on any evidence. He also submitted that the ratio of raw materials and finished product is 100 : 95. He further submitted in the statement given by V. Lakshmikanthan, Production Manager, there is no averment about receipt of raw materials. The learned Counsel also invited our attention to the Affidavits filed by various persons such as S/Shri A. Paramasivam, P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard cannot be accepted. As regards removal of scrap, the department had rejected permission, but in spite of that they had indulged in clandestine removal of the scrap. There is no evidence that for storage of excess stock they had taken the premises of FPL on rental basis. Both companies are separate legal entities though they are of the same group i.e. MAC group. He submitted that the learned Commissioner has considered all the points and has given a considered finding on each aspect of the matter submitted by the appellants. The learned Commissioner has relied upon not only the statement of the Dy. Manager, but also the deficiency noticed by the investigating officers from the statutory records and statements was taken to get the statutory documents clarified and the statement was never retracted by the appellants. He further submitted that once they availed the Modvat credit on the inputs, inputs cannot be removed as such and they have to be removed only on payment or duty at the appropriate rate of such removal as if the goods have been manufactured by them. As regards removal of scrap, despite permission being refused, they have removed the scrap without payment of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules, 1944 and the goods so removed are liable to duty. (b) As regards the scraps removed for conversion into pipes and return of the same to the appellants, we observe that the appellants themselves have admitted that they had sought for permission for such removal of scraps under Rule 57F(3) and inasmuch as the permission was not granted, they removed the goods on their own. Contravention of the Rules is therefore writ large on the face of the records. Further the appellants have not come forward with acceptable evidence regarding removal of such converted goods on payment of duty. Therefore, the finding arrived at by the Commissioner in this regard cannot be found fault with. (c) As regards the other point that raw materials received and the finished goods cleared which was in the ratio of 100 : 95, during the year 1994-95, we observe that in the face of the records showing removal of raw material and finished goods viz. PVC pipes, shortfall, and excess stock of PVC pipes valued at Rs. 3,89,620/- without properly accounting, as held by the lower authority, correlation between raw material and finished goods is not possible and we find no fault in the conclusion arri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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