TaxTMI 
TaxTMI 
1998 (10) TMI 233
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....Rs.3 lacs on Shri Ashish Sethi, Director of the company. 2.   The facts of the case briefly stated are that the appellants are engaged in the manufacture of aerated waters. Modvat credit became admissible on glass bottles as inputs for the manufacture of aerated waters from July, 1991. Intelligence report indicated that the assessee was selling glass bottles after availing and utilising modvat credit. Scrutiny of the records submitted by the assessee also revealed that the glass bottles were sold on higher rate in comparison to purchase rate which indicated that the glass bottles sold were in good condition and were of usable nature. It also revealed that the sold quantity of a particular branded bottle is more than purchased quanti....
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....ous process; that identification marks are embossed on the bottles lot-wise; that it was impossible to maintain such identification marks in view of the fact that the bottles were being handled in different processes by different persons. The ld. Counsel submits that on the basis of balance sheet as on 31-3-1994, the appellants had a stock of 85,92,260 of bottles; that the bottles according to the balance sheet as on 31-3-1991 were 66,80,263. The ld. Consultant submits that the whole of this stock plus some more bottles purchased during 1-4-1991 to third week of July, 1991 was pre-modvat stock; that without these bottles, they could not have achieved a turnover of 3 crore of filled bottles during 1991-92 which were cleared on payment of dut....
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....ottle are to be deducted and thus net sale realisation per bottle at the time of sale works out to Rs. 2.50 per bottle as against the bottle cost Rs. 4.80 per bottle. 5. Explaining further, ld. Consultant submits that `Citra' brand was launched in 1991-92 and before launching, adequate preparation by way of proper stocks of bottles was undertaken. He submits that during 1991-92, they had sold 69 lakh bottles of 250 ml; that for sale of this quantity, they required a minimum of 23 lac bottles; that this clearly indicates that at the time of launching Citra in 1991-92, they had a stock of more than 23 lac bottles of Citra; that this showed that the tocal sale of 250 ml of Citra of 14,98,015 bottles were out of pre-modvat stock of Citr....
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....ant submits that there was nothing wrong in calling the worn out bottles as scrap or their sale book as "Scrap Bill Book" inasmuch as for the appellants they were scrap as they were not fit to be used in the sophisticated market of metro cities. Relying on the judgement in the case of Ashok Leyland Limited [1996 (83) ELT 364], ld. Consultasnt submits that in this case the Tribunal held that "In case an input has been held to be eligible and which is used in the final products and it became defective because of use in conjunction with the final products by virtue of that use became unusable that has to be treated as waste." He submits that in view of the above findings of the Tribunal, they had rightly treated old chip neck and disfigured bo....
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.... on which Modvat credit was taken. Ld. Consultsant pointed out that 69 lac bottles were cleared during 1991-92 on payment of duty. For this turnover, at least 23 lac bottles of Citra were necessary. Citra was introduced in 1991-92. During the year 1991-92, 5.29 lac bottles of Citra were purchased. Thus at least 10 lac Citra bottles of 250 ml. were available with the appellants. During the year the appellants sold 8,16,415 bottles of Citra. Since Citra bottles of the order of 18 lac were with the party prior to introduction of Modvat credit, therefore, sale of 8,16,415 could possibly be out of pre-Modvat stock, so also can be said on the sale of these bottles in 1994-95. Simply because relying on the evidence of S/Shri B.S. Negi and Ashok Ch....