2004 (1) TMI 425

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....problems. While RCP accounts of production clearance were kept no such accounting of (RCP-OS) was kept till September 1991. It was accounted only after 1-10-1991 in RG-1. 2. RCP-OS was sent to job worker for grinding under challans of their own and not following strictly the provisions of Rule 5F(2)/F(3) and after grinding RCP-OS was disposed off by mixing it with RCP and cleared the same on payment of duty or by clearing RCP-OS to sister unit in Mumbai and Calcutta on payment of duty. Since quantity of RCP-OS was also received from Mumbai unit and Modvat credit was obtained on it. 3. (a)   Based on reconciliation charts prepared by the assessees office and the RG-1 entries a show cause notice was issued proposing that ....

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.... required to pay duty on it. The value of 74 MTs. RCP @ Rs. 36,334/- per MT comes to Rs. 26,88,716.00 and the Central Excise duty on it @ 30% ad valorem. comes to Rs. 8,06,615.00 which is recoverable from the assessee under proviso to Section 11A(1) of the Act." (c)        The Commissioner rejected the plea of RCP-OS to be an intermediate product and held the accounts to be required to be maintained for it and in not doing so, and following the procedure, would be establishing mens rea to invoke proviso clause to Section 11A(1) and penalties and ordered. (i)       "Central Excise duly amounting to Rs. 8,06,615/- (Rupees eight lakhs six thousand six hundred fifteen only) ....