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TMI Blog2017 (12) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... ly from imported raw material. The fact that Tribunal had directed to apply the principle of FIFO method, just because material got mixed, it cannot be said that entire quantity of finished goods was manufactured out of mixture of imported and indigenous raw material. The FIFO method has been suggested by the Tribunal to segregate the quantity relatable to finished goods manufactured out of indigenous and imported raw material - reference made by IIMM was not proper - matter remanded for getting entire data of aniline oil to arrive at quantity of finished goods manufactured and cleared in DTA wholly or partly from the imported raw material. Appeal allowed by way of remand. - E/551, 552 & 871/07 - A/90879-90881/2017 - Dated:- 21-11-2017 - Mr Ramesh Nair, Member (Judicial) And Mr. Raju, Member (Technical) Shri. R.B. Pardeshi, Advocate for the assessee Shri. Sanjay Hasija, Superintendent(A.R.)for the revenue ORDER Per : Raju These appeals have been filed M/s. Konkan Synthetics Chemicals Pvt Ltd and Shri. Santosh P. Mehta against the Order of the Commissioner dated 29-12-2006. Revenue is also in appeal against the said order. 2. Ld. Counsel for M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e unit must have a separate machinery; separate godowns and separate branches of manufacturing process. 2. The matter has been examined. It is reiterated that the benefit of notification No. 8/97-C.E., dated 1-3-97 may be allowed to the units using imported as well as indigenously procured raw materials provided the unit is able to satisfy the jurisdictional authorities beyond doubt that the goods to be sold in DTA are manufactured out of wholly indigenous raw materials by way of maintenance of records etc. as provided in the said Board's Circular. Maintenance of separate records would include, inter alia, separate raw material registers for indigenously procured goods and imported ones, separate finished goods registers - one for final products manufactured out of indigenously procured raw materials and the other for final products manufactured out of imported materials, batch-wise production and despatch registers in respect of the quantity manufactured and sold in DTA etc. The jurisdictional officers would thus need to satisfy themselves that the goods under DTA sale have been manufactured wholly out of indigenous raw materials. The Circular referred to above even enjoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Notification No. 8/97 for entire clearance to DTA as appellant did not have facility to store imported and indigenous aniline oil separately. During the investigation statements of Mrs. R.P Paresh and P.M Parekh, proprietor of M/s. Pravin Dye Chem were recorded wherein they stated that for certain quantity of aniline oil they had only raised invoice but not supplied any aniline oil to Konkan Synthetics Chemicals Pvt Ltd. they also stated that after obtaining cheques from Konkan Synthetics Chemicals Pvt Ltd they returned the said money in cash. 2.2 In the show cause notice, analysis of monthly consumption and production was done and from that data allegation was made that certain quantity of final product manufactured out of imported input has been cleared to DTA availing exemption under Notification No. 8/97. Therefore demand of duty was made. The said demand was confirmed and the matter was agitated before this Tribunal. Tribunal vide Order No. A/1205- 1206/WZB/2005/C-II dated 28-10-2005 remanded the matter observing as follows: We find prima facie charge of Aniline oil of imported origin being used in the manufacture of the products cleared to DTA could be arrive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised during the adjudication on the basis of statement of the employees wherein they have stated the imported and indigenous oil was never stored separately. Ld. Counsel argued that all the employees had sworn a common affidavit on 20-9-2006 explaining factual position. In the said affidavit all these employees had stated that indigenous and imported aniline oil was stored separately and through intricate network of tanks and pipelines and vavles material was kept stored. In view of the above Ld. Counsel argued that impugned order did not follow the direction given by the Tribunal and therefore is bad in law. 3. Ld. A.R. relies on the impugned order. He further argued that statements were given by following persons: (i) Mr. Ramesh Laxman Dhadve-Production Supervisor (ii) Mr. Santosh Kisan Bhosale- Excise Incharge (iii) Mr. Milind Prabhakar Desai- Supervisor (iv) Mr. Sunil Shankar Oak- Worker (v) Mr. Dinesh Balkrishna Kawankar Worker (vi) Mr. Rajendra Balkrishna Ghag- Worker (vii) Mr. Santosh Gunaji Bhuwad- Workder He argued that if the statements given were not voluntary they should have retracted immediately after the same was given. He fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also the finished goods manufactured as well as cleared by the assessee have been thoroughly studies by us. The formats used/applied for the datasheets to highlight the FIFO principles (primarily Receipts Issues) are abundantly clear cut and prima facie, in our considered opinion, there appears to be excess consumption of imported Aniline Oil. The conclusion reached by the said report is that of FIFO basis there is excess consumption of imported Aniline Oil. On the basis of said report the benefit of Notification No. 8/97 has been denied to the entire clearance to DTA for the period 1-3-2000 to 20-3-2002. The report of the Indian Institute of Material Management does not state that all the clearances made to DTA were not out of purely indigenous material. All it says is that imported Aniline oil has been consumed in excess of that which is required for production of exported goods. It does not automatically mean that entire quantity of goods manufactured and cleared in DTA has been manufactured out of mixed or imported Aniline Oil. The perusal of the show cause notice shows that it calculates the requirement of Aniline oil for manufacture of each product on per kg basis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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