9911796707
TMI Blog2005 (5) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... fication in rate or and without payment of duty. They were issued a Show Cause Notice for the clearance during the period of 10-4-97 to 26-5-98 alleging that they had availed exemption under and in terms of the Notification No. 4/97-CE, dated 1-3-97 issued and paid excise duty at concessional rate during 1st March, 1997 and 1st June, 1998. The appellant has also been availing of full exemption with effect from 2-6-98 by wilful misstatement or suppression of facts of fly ash content in the manufacture of Asbestos products i.e. ACS and also by resorting to clandestine removal of the GS on private challan over and above of Central Excise invoices issued. Duty demands were therefore made and penalties were imposed under Section 11AC read with rule 173Q on M/s. Assam Asbestos Ltd. along with interest as applicable under Section 11AB. Penalties under rule 209A of the Central Excise Rules, 1944 were imposed after coming to the following findings - I have carefully gone through the case records and replies submitted by the assessee. The Department alleged here that the assessee had availed the benefit of Notification No. 4/97-CE, dated 1-3-97 and 5/98-CE, dated 2-6-98 as they were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various qualities of fly-ash used. They further stated that the department has not verified the stock of fly-ash which would clearly indicate the actual quantity of fly-ash used. So in absence of such study the department s findings were not correct and as such there could not be any evasion of their part. I find here that the department had brought the allegation on the basis of the recovery of some private documents which indicated the actual use of fly-ash declared to the department. The aspect of percentage gain as mentioned in the show cause notice is for the purpose of justifying the authenticity of the entries made in the said private documents. After going through the show cause notice I find that the assessee also in a number of their private documents which were recovered from their premises had recorded particulars of percentage gain as respectively related to the actual use of fly-ash and that declared to the department. So, the contention of the assessee that percentage gain had nothing to do with the quantum of fly-ash used does not hold good. Similarly the department has also justified non-use of fly-ash by the findings that M/s. Bongaigaon Thermal Power Station had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of clandestine clearances do not have any force. I also find M/s. Satisfacto Enterprises, Bonda, Narengi, Guwahati, M/s. Shakti Steel Enterprises, H.B. Road, Fancy Bazar, Guwahati, M/s. J.H. Agencies, S.R.C.B. Road, Fancy Bazar, Guwahati, M/s. Sanand Enterprises, Bijaynagar, Assam, M/s. Dharamchand Niranjan Kumar, Pathshala, Barpeta, Assam M/s. Vinod Motors, Barpeta Road, Assam, M/s. G.S. Steels, 29A, Cantonment, Shillong, Indira Transport Corporation, Fancy Bazar, Guwahati are involved in acquiring possessing of, concerned in transporting, depositing, removing, keeping, concealing, selling or purchasing of the said excisable goods and therefore they are also liable for penal action under Central Excise Act and Rules made thereunder. 3. After hearing both sides and considering the material on record it is found: (a) (i) Show cause notice dated 13-7-2001 was issued to the appellants, herein, inter alia alleging that the manufacturer did not use the required percentage of fly ash in the production of ACS and obtained the exemption by suppression of actual use of fly ash. (ii) Excess unaccounted manufacturer and clandestine removal of GS from the factory wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys it is only for an isolated interrupted 77 days it is alleged that percentage of fly ash by weight in the ACS manufactured on those days were less than 25%. During the entire impugned period the appellants continued to avail the exemption of use of fly ash to the extent of 25% and that is reflected in the statutory records maintained as required and produced. These records have been checked and verified. The appellants factory is located in Assam and Bongaigaon Thermal Power Stations of Assam Electricity Board is short distance away from the appellants factory. It would be logical that fly ash from this power station, stated to be a inferior quality, was required to be supplemented by mixing and using other normal better quality fly ash. A formula was arrived at of using about 45% Bongaigaon fly i.e. 89 kg of other fly ash in a batch of 134 Kg of total fly ash. The Commissioner should not have jumped to a conclusion from a rain check of accurate use of Bongaigaon fly ash and concluding that no other fly ash was in use. This procedure adopted has ignored statement especially of Senior Production Manager which very categorically state that a mix of 45 kgs and 89 kgs has been used b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be a reason to conclude that Bongaigoan fly ash were not being used. The appellants submit that they were regular processors/buyers of Bongaigoan fly ash and have submitted documents of purchase to that effect then officers have clearly stated that such ash was being used. It is not explained in the impugned order as to how, the ACS would have been produced, if Bongaigoan ash was not used. The Commissioner s order are silent on this vital issue. The total quantity of ACS made cannot emerge from such actual quality as shown in the chits/slips. Surely the ACS made and removed has physical parameters and Ash would be giving them an important component by weight. If only the quantity of 89 Kgs was used the production cannot be for 143 Kgs. (vi) Allegations as regards percentage of moisture gain based on 2 fax messages disregards the fact, that there is no doubt that water is/was used in the manufacture. The slurry so made with ash. Thus water was to be drained out, recycled and re-used. Board by its circular dated 10-8-99 have clarified that moisture content is wholly irrelevant the percentage of Fly Ash in ACS, percentage was to be gathered by dry weight. Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispose fly ash private parties during the April, 96 to July, 99 and cannot be confirmed. What would a Thermal Power Station do if not disposed off fly Ash? (ix) From the percentage gain shown it is observed that no unit of production in excess were related to the percentage production. In view of the findings hereinabove we cannot conclude and up hold the finding of the Commissioner, that there was no proper prescribed use of fly ash as per notification in the manufacture of ACS. Therefore duty demands by denial of the notification benefit as made on ACS sheets cannot be upheld. (c) As regards the demand of duty of GS sheets it is found:- (i) The notice alleged that a quantity of about 257 MT of GS was cleared without payment of duty based on a chart enclosed. The body of the notice gives details of certain quantity and specific instances. Commissioner has merely reproduced the same in the order. The quantity thus accounted would be only 32 Mts. The order of the Commissioner should have arrived at findings as regards the entire quantification of 257 MTs. There is thus denial of principles of natural justice. (ii) The rough sheets relied upon do not indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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