TaxTMI 
TaxTMI 
TaxTMI 
2003 (2) TMI 410
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....rched their factory and business premises. During the course of search, some incriminating records and documents were seized, for further investigation. It was revealed that M/s. ABS Industries, Baroda had manufactured and cleared the excisable goods under Delivery Challans of different series namely RAN. SM, K, STC etc. It appeared that for clearing goods under challans of RN Series and SM Series, M/s. ABS Industries had neither paid Central Excise duty nor issued duty paying documents. The clearances under the respective delivery Challans were further co-related with the statements prepared by M/s. ABS for their internal utilization in respect of rejected materials received and free replacement provided to their customers which resulted i....
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.... showed a large number of short clearances as well. He confirmed the demand raised on the goods cleared by the assessee as free samples. The Jurisdictional Assistant Commissioner was directed to quantify the demand on samples and it has been later quantified by the Assistant Commissioner which comes to Rs. 30,690/-. The Commissioner dropped the demand of Rs. 86,32,806/- which was raised on the alleged clearance of the received reprocessed rejected materials, by treating it as a procedural lapse on the part of M/s. ABS and thereby giving them the benefit of Rule 173H of the Rules, he has also imposed a penalty of Rs. 25,000/- on the assessee under Rule 173Q(1) of the Rules. He did not impose any penalty on Shri K.C. Joshi, Senior Executive o....
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....5. We have heard Shri Uma Shankar ld. SDR and Shri M. Chandrashekharan, Sr. Counsel. A careful reading of the show cause notice brings out the fact that duty of Rs. 86,63,496/- was raised for the reason that the procedure in respect of duty paid rejected goods was not followed by the Respondents and that the rejected goods were not re-processed exclusively and separately but were reprocessed by mixing the same along with other goods. The show cause notice alleges contravention of the provisions of Rule 51A, 173H and 173L inasmuch as the assessees did not obtain prior permission of the proper authority in respect of rejected materials received by them in their factory premises and reprocessed the said materials along with other goods an....
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....ed goods are separated into three batches. One bag is drawn from each batch and mixed together in the extruder itself for mixing and remelting to give a uniform shade. In case of micro contamination 400 size mesh is also inserted within the extruder to remove contamination. Therefore, in the case of reprocessing the steps mentioned (a) to (d) in the above mentioned letter do not take place. (b) Rejected 'ABS resins' and reprocessing 'ABS resins' are in almost all cases in the same form i.e. granules. Sometimes rejected materials are also received in the form of shelling obtained after scrapping unsuccessfully moulded material. (c) No additives or chemical are added in reprocessing. However....
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....he extruder to obtain the desired shade and again the material is obtained in the same form of granules and the same are packed in 25 Kgs bags. In both type of cases of rectification/repair/reconditioning of (i) shade variation (ii) dust contamination, there is no addition of any other chemicals or additives nor is there any change in the physical chemical properties. The reprocessing done as above does not result into any change in the name or characteristics of and use of the starting material i.e. duty paid rejected ABS resin. 7. We also find that the department had not disputed the character of duty paid rejected materials, which were reprocessed and redespatched. The statements of the officers of the respondents company are all t....