9911796707
TMI Blog2007 (2) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 3,64,284/- on unaccounted production of 46.495 MT + 135.365 MT of channels, together with interest and penalty of equal amount, confirmed demand of Rs. 1,27,801/- on shortage of 69.564 MT of finished goods together with equal penalty, imposed penalty of Rs. 10 lakhs for contravention of Rule 57A read with Rule 57G of the erstwhile Central Excise Rules, 1944 for misuse of Modvat credit and also imposed a penalty of Rs. 2,50,000/- upon assessee No. 1, and confirmed duty demand of Rs. 29,63,822/- on unaccounted production of 243 MT of Tiscon Bars and Angles and 1235.175 MT of Angles, Flats and CTD Bars and 8.240 MT of Misrolls against M/s. Prabhu Steel Industries (hereinafter referred to as 'Assessee No. 2') together with interest and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same in the RG 23A Part-I and in formed the department accordingly and taken Modvat credit of a lesser amount, which was not done As regards the second explanation, (÷) and (-) variation in weight due to adopting the sectional weight method would neutralize each other over a period of time and therefore there would be no tangible difference. As regards cutting and burning losses, such losses have no bearing on the stock of inputs and are only relevant for arriving at quantity of finished products and therefore this explanation is also not acceptable. We, therefore, uphold the finding of the Commissioner on the shortages of inputs, and uphold duty demand of Rs. 7,84,494/- but reduce the penalty to Rs. 1,00,000/-. Shortages of Finished G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules were being filed. They were maintaining prescribed statutory records, such as R.G. 1 Register, Form 4 Register etc. and filing periodical RT 12 and RT 5 returns. Central Excise Officers were regularly visiting the factory for stock verification, internal audit etc. The three main sections in the appellant's factories are raw materials section, production section and finished goods section. Labourers give the details of number of pieces produced to the fitter, who in turn gives appropriate size and number of sections produced, to the dispatch incharge Shri Babusingh Solanki who is the Excise Assistant, looking after maintenance of statutory records and removal of the goods, prepares the production report which is verified by Shri Chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2-1-1997 while no production of these goods has been entered for that date in the private records, R.G. 1 shows production of angles on certain days in January 1997 while the private production reports do not show any production of angles, on 22-1-1997, 28-1-1997 and 29-1-1997, no production of Beams is shown in the production reports while R.G. 1 shows production and further the production of beams on 31-1-1997 as entered in R.G. 1 is in excess of the production shown in the said reports on the said date. In respect of steel metal scrap R.G. 1 shows production during January 1997 while the production reports maintained by the Security Supervisors show 'Nil' production and also shows Nil product on of flat during the same month for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and removed. The statement of Shri Chandrakant Dahale which has been heavily relied upon in the impugned order is uncorroborated and has also been retracted, and therefore cannot be relied upon to prove unaccounted production and clearances. There is also no evidence of removal or sale of unaccounted production. Also keeping in view the annual production capacity is fixed by the Commissioner, the production for the period in dispute is comparable with the capacity determined and it has not been brought out that the appellants have capacity to manufacture the quantity found to have been produced in excess. 5. In the light of the above discussion we hold that the findings of unaccounted production and clearance cannot be sustained and accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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