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TMI Blog2016 (3) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... barrels & Drums as damaged/rejected goods, during the period of Sept. 2001 to March 2006 and did not reverse Central Excise duty equivalent to actual credit availed. The Respondents cleared the inputs as such on a very low transaction value, than the original purchase value of inputs and paid Central Excise duty on the lower value. Thus, the Respondents are alleged to have failed to pay duty equal to the duty taken as credit on the inputs cleared as damaged/rejected prior to use in manufacture of final product as prescribed. The Respondents availed CENVAT credit to the tune of Rs. 23,30,388/- on the purchase of total 20934 Nos. of said inputs and paid Central Excise duty to the tune of Rs. 8,92,921/- on as such clearance of the damaged/rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er required of the barrels and confirm that these are as per required specifications. If these are not as per the specifications the barrels are considered as rejected and the rejected barrels are returned back to the supplier under excise invoice by reversing the cenvat credit availed on / attributable to the quantity rejected. There is no dispute between appellants and department on the rejected inputs at this stage. 2. The second stage of rejection is as under :- (i) As per standard manufacturing and quality policy after filling first four barrels of each product pack are kept separately for QC testing of finished goods. The quality dept then checking of these four barrels. If the results are as per the specifications then the produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve received more value from the buyer of rejected barrels than the value shown in the invoices for charging Central Excise duty. It is also not the case that the rejected barrels are recycled & purchased again by the appellants. In view of above, it seems to be more assumption & presumption as pleaded by the appellants, based upon which show cause notice issued & confirmed by the lower adjudicating authority since the dept. has not found any hole in procedure adopted by the appellants on receipts, manufacturing, clearance and accounting of transactions which is based on Standard Operating Procedures under which every single material is assigned an unique number/codes as explained by them in their defence reply. In the circumstances as discu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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