TaxTMI 
TaxTMI 
1996 (7) TMI 261
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....had laid down the standard of consumption of inputs as raw materials used in every unit of production. During two months namely May, 1991 and December, 1991, the consumption of sulphonic acid was substantially in excess of the limits laid down by the principal manufacturer. They therefore, recovered a sum of Rs. 1,13,455/- from the job workers. Somewhere in April, 1992, the jurisdictional officer in a visit to the factory located this communication. A Show Cause Notice dated 11-4-1994 was issued to the appellants seeking recovery or reversal of modvat credit amounting to Rs. 72,114/- on the ground of non-utilisation of the sulphonic acid during the month of May, 1991, acknowledging appropriation of a sum of Rs. 74,471/- already reversed by ....
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.... not be denied. Referring to the judgment of Allahabad High Court in the case of Varuna Sulphonators P. Ltd. v. Union of India [1993 (68) E.L.T. 42 (All.)], ld. advocate claimed that the meaning of the words "used" and "consumed" was analysed in para 5 thereof. He submitted that the word "used" was synonymous to the word "consumed" and the definition of the word "consumed" would include loss by evaporation also. The other judgments relied upon were :- 1. CCE, Bangalore v. Eros Pharma (P) Ltd. - 1994 (73) E.L.T. 72 (Tri.) 2. CCE, Bangalore v. Vijaya Rubber Works - 1994 (73) E.L.T. 75 (Tri.) 3. CCE v. Mexon Industries Limited - 1994 (72) E.L.T. 483 (Tri.) Ld. Advocate stressed that the last named judgments lays down....
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....n payment of duty. The production of any waste material arisen out of such process in dealt with in the Rule 57D. The rule stipulates that where during the manufacture of final product any waste residue or by-product arises, the credit of duty on such inputs contained in such waste, refuse or by modvat cannot be denied. The issue involved in this case is whether the loss by spillage or leakage can be considered to be waste, residue or by-product in terms of Rule 57D. 10. The working of Rule 57D defines waste, residue or by-product as visible entities and holds that credit on any input contained in such residues etc. cannot be denied. In all the citations relied upon by the ld. advocate also, the waste residue or by-product were good....
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.... officer to the unit they voluntarily reversed the credit not due i.e. for spillage which has occurred in December, 1989. 13. Ld. advocate has argued that the show cause notice does not state how the assessee has contravened the provisions of Rules 57A and 57F. The show cause notice in paragraph 5 and 6 does refer to these rules and says that the sulphonic acid for which the payment was made by the respondent to the principal manufacturer was not used by them in the manner prescribed in these two rules. 14. Ld. advocate has contested the imposition of penalty on the ground that his client's behaviour was not designed to evade the duty. Ld. advocate has also challenged the order of the ld. Collector on the grounds of limitati....