TMI Blog2014 (7) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... age of goods would only mean that there has been either clandestine manufacture and utilization of goods not declared to the authorities or that there has been clandestine clearance of raw materials or inputs as such. There is no such charge of either in the Show Cause Notice or in the Order-in-original. Wastage generated during the course of manufacture of the finished goods out of raw material procured duty free for export with permission of the department, however the Appellants have not proved the input output ratio 100:100 but Appellants have already paid duty on the price of the wastage occurring in the course of manufacturing, hence there is no short payment of duty on this ground. I further find that wastage/shartage occurred d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002 read with Notification No. 43/2001-CE(NT) dated 21.06.2001, read with Notification No. 34/2001-CE(NT) dated 21.06.2001, it was noticed that the appellant did not pay Central Excise duty on inputs amounting to ₹ 3,74,557/- on the quantity of shortage/wastage generated during the process of finished exempted goods. 3. Accordingly, a Show Cause Notice C. No. V(72)58/Dem/2004/7096-97 dated 03.09.2004 was issued by the Deputy Commissioner, Central Excise Division, Bhiwadi asking the respondent as to why:- (i) Central Excise duty amounting to ₹ 3,74,557/- should not be recovered from them under Section 11A of the Central Excise Act, 1944. (ii) Interest at appropriate rate should not be recovered from them in terms of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, it was alleged that the conditions no. 2 specified in the Notification No. 43/2001 CE(NT) and Rule 6 of the Central Excise (Removal of goods at concessional rate of duty for manufacture of excisable goods.) Rules, 2001 have not been followed, condition 2 stipulates that provisions of the Rules 2001 shall be followed mutatis mutandis. The Rule 6 of the Rules, 2001 stipulates that where subject goods are not used by the manufacturer for the intended purpose, the manufacturer shall be liable to pay the amount equal to the difference between the duty leviable on such goods but for the exemption and that already paid, if any, at the time of removal from the factory of the manufacturer of the subject goods, alongwith interest and the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it is also on record that input output ratio declared by the Appellants was verified by the Deputy Commissioner through the Range Superintendent and the Deputy Commissioner after due verification had countersigned the application in the manner specified in the Central Excise (Removal of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 2001. I also find that the Appellants were using such certificate signed by the officers concerned to procure raw materials duty free for use in the manufacture of export goods. 9. He has also further observed as under:- 8. I further find that it is also on record that input output ratio declared by the Appellants was verified by the Deputy Commissioner throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have already paid duty on the price of the wastage occurring in the course of manufacturing, hence there is no short payment of duty on this ground. I further find that wastage/shartage occurred during the course of the manufacture of the finished goods for export is also covered under the para 2.2.2. part VI Chapter 7 Central Excise Manual, as the wastage is genuine has to be accepted as unaccounted loss, moreover the Department has not proved anywhere any clandestine removal of raw material or finished goods, therefore the demand is not sustainable under Section 11A of Central Excise Act, 1944. 10. Accordingly he has allowed the appeal, by the referred to various decision of the Tribunal laying down that shortages on account of filin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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