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TMI Blog2005 (11) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent-unit), one Shri R. Manoharan (Sales Administration Manager) and one Shri R. Nallasivan (Sales Executive) were recorded. Statements were also recorded from certain functionaries of the Aladiyur unit. From these statements and scrutiny of records, it appeared to the department that a quantity of 25,349 Kgs. of yarn had been clandestinely removed from the respondent-unit in excess of the quantity covered by invoices issued by the said unit in respect of DTA clearances to the Aladiyur Unit. It, further, appeared to the department that the DTA clearances were undervalued by the party. On this basis, a show-cause notice was issued on 12-9-2001 to the respondent demanding duty of Rs. 10,79,335/- on the yarn cleared by them during the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f goods from the Ambasamudram unit or of physical receipt of goods at the Aladiyur unit was available, that no evidence of the Ambasamudram unit having actually manufactured excess quantity of yarn existed and that no evidence of the Ambasamudram having consumed excess raw-materials or excess electricity was available. He submitted that, as rightly observed by ld. Commissioner (Appeals), the Monthly Manufacturing Reports (MMRs) were based on estimates only and that the Profit Loss Account was based on such MMRs. Hence the lower appellate authority was right in not placing reliance on the P L Account. He also challenged the appellant's claim that some of the employees of the respondent-company had admitted clandestine removal of yarn. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asmuch as any duty, if paid, would have been available as Modvat credit to their own Aladiyur unit. In such a revenue-neutral scenario, the allegation of clandestine removal of goods with intent to evade payment of duty was untenable. In this connection, reliance was placed on the Tribunal's decision in Jay Yuhshin Ltd v. CCE, 2000 (119) E.L.T. 718 as well as the Supreme Court's judgment in CCE, Mumbai v. Mahindra Mahindra Ltd., 2005 (179) E.L.T. 21 (S.C.). For these reasons, it was argued that this was not a fit case for invoking the extended period of limitation under Section 11A for demanding duty from the assessee. Without prejudice to these arguments, the authorized representative pointed out that any goods removed clandestinely by E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents and their sister unit (DTA unit at Aladiyur). The records from the EOU are MMRs and Dispatch Memos and those from the other unit are Traffic Register and P L Account. The original authority itself appears to have accepted the fact that the MMRs prepared by the assessee were based on estimates only. It was also accepted that the P L Account of the DTA unit was based on the MMRs of the EOU. The assessee claimed before the original authority that the MMRs were internal reports prepared by the Manager incharge of the EOU to appraise Divisional Heads of the performance of the unit with regard to production, clearance, utilization, efficiency etc. and that these reports were not meant to satisfy any statutory requirement. The data containe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne removal of yarn from the EOU to the DTA unit. In the circumstances, it cannot be held that the Revenue has succeeded in establishing the charge of clandestine removal of yarn against the respondent. It is not out of place to mention that the proposal to impose penalties on S/Shri S. Sankarabagam (Manager) and R. Nallasivan (Executive-Sales Admn.), who were closely associated with production and clearance of yarn from the EOU was dropped by the original authority. This has certainly a weakening effect on the Revenue's case that the company indulged in clandestine removal of goods. 5. For the reasons noted above, I uphold the findings of the Commissioner (Appeals) on merits. Hence, it is not necessary to examine the limitation issue. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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