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TMI Blog2007 (1) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... bills of entry were assessed and the goods cleared against payment of Basic Customs Duty and countervailing duty. The appellants took credit of the entire amount of CVD paid by them. This was during the period February, 1997 to March, 1998. Later on, officers of the department visited their factory and conducted a scrutiny of records and made allied enquiries. The results of these enquiries revealed that the appellants had taken Modvat credit on a total quantity of 1052 MTs of copper concentrate not received in their factory. On this basis, a show-cause notice dated 16-6-1999 was issued to the party seeking to recover an amount of duty of over Rs. 16 lakhs equivalent to the credit alleged to have been taken irregularly as also to impose penalties on them under Section 11AC of the Central Excise Act and Rule 173Q of the Central Excise Rules, 1944. The demand was contested on merits as well as on limitation. In their reply to the show-cause notice, the party submitted inter alia that the difference in weight might have occurred on account of evaporation of the input during the course of transit, handling and storage. They claimed to be entitled to take credit of the entire amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise, Nagpur v. Associated Cement Companies Ltd., 2006 (197) E.L.T. 215 (Tri.-LB) = 2006 (72) R.L.T. 403 (CESTAT-LB), wherein it was held that Modvat credit was admissible in respect of the entire quantity of input (Phospho Gypsum) received in the respondent's factory and that this benefit was not to be denied on the ground of loss of input due to evaporation of moisture content. 3. Learned SDR, on the other hand, submits that, under Rule 57A read with Rule 57G of the Central Excise Rules, 1944, Modvat credit on input was admissible only in respect of that quantity of input which was received in the factory and used in or in relation to the manufacture of final product. In the present case, 1052 MTs of copper concentrate were, admittedly, not received in the factory, but Modvat credit was taken on this quantity. It is submitted that 6 ex-bond bills of entry were filed by the appellants for clearing the warehoused goods for home consumption. After the 5th of such clearances, there was no quantity of input left and, therefore, the 6th ex-bond bill of entry was filed with intent to avail Modvat credit of duty on input not available for clearance for home consumption. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Qty. actually Received, Weighed and stored in the Customs bonded warehouse inside the factory** (IN WET METRIC TONS) (1) (2) (3) (4) (5) 1. HIGHLAND VALLEY 1538/28-3-1996 10597.570 10423.220 2. TINTAYA-l 207/14-10-1996 11000.000 10775.605 3. GIBROLTAR 6947/27-12-1996 8368.860 8259.950 4. OSBORNE 1092/21-2-1997 10051.000 9892.420 5. TINTAYA-II 309/29-4-1997 11594.840 11331.365 Shortage of inputs at the time of receipt inside the factory*** (IN WET METRIC TONS) Details of the Ex-bond Bills of Entry raised in order to cover the shortage after exhausting the entire stock of inputs received. RG 23 Part 1 entry details under which the non received inputs were accounted as if received under the Ex-bond Bill of Entry referred at Col.(7). Credit of Duty taken on the strength of B/Es which do not cover any receipt of inputs issued for covering the short receipt in inputs received inside the factory (In Rs.) (6) (7) (8) (9) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry. In respect of the input covered under direct clearance for home consumption also, there was a shortage of 122.985 MTs of copper concentrate vis-a-vis the quantity of goods mentioned in the corresponding bill of lading and bill of entry. Admittedly, credit on this quantity of the input was also taken by the appellants. It is their case that the total shortage (1052 MTs) of input was due to evaporation which might have occurred in the course of transit, storage and handling. Some of the consignments were imported through Cochin port and transported to the appellants' factory at Tuticorin and the remaining consignments were imported through Tuticorin port itself. However, the appellants do not seem to be distinguishing the two cases while maintaining that the entire short receipt of input in factory was due to evaporation. They have also not adduced any evidence of the alleged volatile nature of copper concentrate. In the present appeal, apart from reiterating the above contention, they have also pleaded that the difference in weight could also be attributable to usage of different weighment scales abroad and at home. These explanations of the appellants, in our view, are not conv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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