Customs, Excise and Gold Tribunal - Mumbai
Patheja Forgings And Auto Parts Mfrs. ... vs C.C.E. And C. on 1 November, 2000
Equivalent citations: 2001(127)ELT513(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. In the order impugned in this appeal, the Commissioner confirmed the proposal in the show cause notice demanding duty from the appellant on various grounds, ordered confiscation of plant and machinery and imposed penalty under 173Q.
2. The appellant is absent and unrepresented despite notice. We have therefore read the memorandum of appeal, impugned order and other connected papers and heard the departmental representative.
3. We shall deal with the demand for duty and penalty. The demand on the ground that some quantity of inputs were cleared by the appellant after paying duty equal to the amount of Modvat credit taken, whereas what should have been paid was the duty prevailing on the date of removal, cannot be supported in the light of the decision of the Larger Bench of the Tribunal in CCE v. Asia Brown Boveri - 2000 (120) E.L.T. 228 holding that law only required reversal of the credit taken by the appellant when he received the inputs.
4. The duty has also been demanded on the ground that there was a difference in the figures of steel bars (used by the appellant for manufacturing forgings for motor vehicles), as shown in the RG 23A register and those furnished to the Income Tax department in Form 3CD. The show cause notice alleged that shortage of 368 tonnes between these two figures indicated that the appellant had used the material to manufacture finished goods, which were cleared without payment of duty. The Commissioner finds that the difference of stock in fact is not 368 but 973 tonnes, but confines himself to the demand on 368 tonnes since that was the figure mentioned in the notice.
5. The notice to show cause mentions only the difference in consumption of raw material, which was 368 tonnes. This quantity was for the period from 1992-93 and 1989-90. The appellant's explanation was that the difference between the 3CD figure and the RG 23A figure was negligible, being on an average, one to two percent. The difference was stated due to losses in processing which occur when the raw materials are subjected to heating, cutting and other operations in the course of manufacture. The difference in the figures is also attributed to difference in the accuracy of different weighbridges. We accept that there could be some process loss, which may not have figured in the 3CD register. The latter explanation is difficult to accept; it is not as if there were two weighbridges, one to be used for Central Excise purposes, and other for obtaining figures for supply to the Income Tax department. In any event, shortage of raw material is not itself enough to come to the conclusion that the raw material was utilised in the manufacture of finished goods without payment of duty. There is no evidence to point to any such manufacture or removal. The ratio of the decision of the Tribunal in Premier Packaging v. CCE -1986 (26) E.L.T. 233, that shortage of raw material alone cannot lead to the conclusion that the raw material must have been used to produce finished goods would apply to the facts of the case.
6. The second reason for demanding duty is that the value of the scrap shown in the balance sheet of the appellant was higher than the quantity of which the duty was actually paid. The contention that there could be some calculation error is not acceptable, in the absence of any evidence in support. We therefore confirm the duty of Rs. 7,860/- on this score. In view of this, we set aside the confiscation ordered of the appellant's plant and machinery, and reduce the penalty imposed on it to Rs. 2,500/-.
7. Appeal allowed in part. Consequential relief.