9911796707
TMI Blog2005 (9) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... 4246.640 Kgs. of Rubber Thread, 5510.400 kgs. of Nylon and 6573.4 kgs. of Rayon, demanding of interest at appropriate rate on confirmed amount under Section 11AB of Central Excise Act imposing a penalty of Rs. 5,06,932/- under Section 11AC of Central Excise Act and appropriating the amount of duty of Rs. 50,000/- paid by the appellant out of the total demand of Rs. 5,06,932/-. 2.1. Briefly stated the facts of the case are that the appellant, a manufacturer of Textile Narrow Woven Fabrics falling under sub-heading No. 5806.20 of the First Schedule to the Central Excise Tariff Act, 1985, alleged to have willfully suppressed the material fact of surreptitious removal of inputs Nylon Rayon, Rubber and polyester during the period from 16-4-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he open market without having any duty paying documents and utilised the same for the manufacture of their final product and on the other hand the appellant removed inputs, on which credit was availed, clandestinely under cover of private challans/chit. In this context the lower authority observed that the allegation was framed on presumption and not on the basis of any documentary evidence. 3.4. The adjudicating officer confirmed the demand of duty on 4246.640 kgs. of rubber thread, 5510.400 kgs. of Nylon and 6573.400 kgs. of Rayon against which the appellant availed Modvat credit but removed the same without payment of duty under Private Challans/Chit during the period from 16-4-1999 to 18-12-1999. 4.1. The appellant stated in their g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts i.e. Elastic Tape falling under heading No. 58.06 of CETA, 1985 was exempted by Notification No. 316/86. At the time of hearing conducted by the lower authority, the appellant failed to produce all the purchase documents of defective raw materials lying with them since long for which the impugned order is passed demanding the aforementioned duty. Now the appellant stated that they have submitted the respective purchase particulars of defective raw materials for considering their appeal favourably by setting aside the impugned order-in-original. 4.3. The appellant further stated that they have paid Rs. 50,000/- on 24-12-1999 before issue of the impugned show cause notice dated 30-1-2003. Without prejudice to the submission made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Nylon and Rayon, on which Modvat credits had been availed, under cover of private chits/challans without payment of Central Excise duty to the tune of Rs. 9,41,349.00 during the period from 16-4-1999 to 18-12-1999. In course of proceeding before the lower authority, the appellant had pointed out certain errors in computation of quantities and corresponding duty leviable thereon, and also placed on record certain invoices evidencing payment of duty on clearances of such modvatable inputs. In the impugned order, relief has been granted to the extent of Rs. 1,31,950/- on such counts. Thus, the demand automatically stood reduced to Rs. 8,09,399/- out of initial demand of Rs. 9,41,349/-. 8.1. The appellant has contended before the lower auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock. 9. In the impugned order, the lower authority, accepting such contentions of the appellant has observed that without detection of any shortage of stock of modvatable inputs as well as finished goods in course of physical verification of stock, it is very difficult to prove that the excess input materials covered under the printed chits were removed without payment of duty from the stock of modvatable inputs. But ultimately, the lower authority held that the appellant s claim for removal of input materials from the defective non-modvatable stock and also from the stock of input materials purchased in the year 1998-1999 under cover of non-modvatable purchase documents is acceptable provided the appellant could produce valid purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods. Thus, it is very clear that such goods lying in defective state since February, 1994 were non-modvatable, and at the time of removals under private chits/challans, duty was not payable. Therefore, the lower authority has erred in demanding purchase documents in respect of such goods, which are easily identifiable as non-modvatable goods. 12. It is a fact that the appellant could not produce documents in respect of purchase of input materials during 1998-1999. But it is also a fact that shortage of stock of modvatable inputs as well as that of finished goods could not be detected in course of physical verification of stock, and appreciating such fact the lower authority itself has observed that it is very difficult to prove that exces ..... X X X X Extracts X X X X X X X X Extracts X X X X
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