Customs, Excise and Gold Tribunal - Mumbai
Bayer Abs Limited vs Commissioner Of Customs And Central ... on 1 September, 2003
ORDER
S.S. Sekhon, Member (Technical)
1. The appellants are availing modvat credit on imported items/goods, which were inputs, having been received on gate passes/delivery challans prepared and issued by their depot at Kandla and/or weighment slips issued by the surveyors at Kandla, the port of import being Kandla and also the lorry receipt issued by the various transporters for transportation of the inputs to the factory at Vadodara District. They were also maintaining quality records/report issued by their own transporters from time to time. A show cause notice was issued proposing to deny the credit on certain quantities of inputs which were alleged to be not in conformity with the dip measurement of storage tank, differences between the initial dip and the final dip at the time of analysing the tanker lorry tanker in the factory / storage tanks that was considered. Based on the these differences in the dip measurement and the actual quantity, the credit taken, a demand was made to reverse modvat credit on certain alleged quantities which were said to have been not received in the appellants premises at Vadodara. The Commissioner after considering the appellants submissions concluded:
"I hold that the dip reading methodology adopted in the show cause notice even for the month of August is not a reliable basis for computing the shortage."
Thereafter proceeded to determine the shortage on the basis of manual weighment method adopted by the notice which he found could be made the basis for computing the shortage in the absence of any other documentary evidence, relying upon the Tribunal decision in the case of Bombay Dyeing and Manufacturing Co. Pvt. Ltd. v. CCE 1999 (113) ELT 331. This shortage was worked out by him on the basis of reports available for August, 2001, only, for the rest the lorry receipts and quality records had been destroyed as per the company's practice a duty demand of Rs. 2,30,139/- was confirmed along with penalty under Section 11AC read with Rule 57I(4) and Rule 57AH of Central Excise Rules, 1944 of equal amount along with interest was demanded. The Commissioner, however, refrained from imposing penalty on the Vice President (Finance) under Rule, 209 A of the Central Excise Rules in view of the facts and circumstances of this case. Hence this appeal.
2. I heard both sides.
3. Learned advocate for the appellants submitted that the show cause notice was based on shortages worked out by the dip measurement methods and the demands confirmed were on assumptions and presumptions derived from August, 2001 lorry weighment reports which was not a charge made in the show cause notice. I find that the contention of the learned advocate that the Commissioner, while adjudicating the matter and quantifying the demands in this case has proceeded and travelled beyond the show cause notice, is correct on facts after I perused the show cause notice issued to the appellants. It is well settled that the adjudicating authority cannot proceed beyond the charges in the show cause notice. If that is a fact then such an order cannot be sustained. Accordingly I set aside the order and allow this appeal with consequential relief, if any, as per law.