2006 (1) TMI 409

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....cturer of craft paper. The split-up of duty demand may be noted first : Description Quantity (Kgs.) Value (in Rs.) Duty involved (Rs.)   Total   1. By clearing the goods recorded in the RG1 without payment of duty at all. (shortage in stock on 21-2-2000) 1284470 10917995 873440 13647 887087 2. By suppressing the production & clearing the unrecorded production without payment of duty (30-7-99 to 20-2-2000) (Based on unaccounted receipt of raw material) 1919228.400 16313441 1305075 20392 1325467 3. By Irregularly utilizing the credit of duty paid on Soda Ash towards the payment of duty on final product i.e. Media Kraft Paper (26-8-97 to 20-2-2000) 360950 N....

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....d. Counsel for the appellant is that, in any case, there was no justification for a pro-rata projection of receipt of raw materials and duty demand, if at all, could be only in regard to likely production of craft paper from the unaccounted quantities of waste paper found entered in the slips. It has also been pointed out that the duty demand for such unaccounted quantity of craft paper comes to only Rs. 3,81,360/-. 5. The third heading of demand is irregular utilization of Modvat credit amounting to over Rs. 5 lakhs. This entry is in regard to soda ash figuring in the statutory record of the appellant as an input. The finding in the impugned order is that soda ash was not received and utilized by the appellant at all as an input. T....

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.... be raised, if at all, only for a quantity that could have been manufactured from those quantities mentioned in the weighment slips. Therefore, the duty demand beyond amount of Rs. 3,81,360/- cannot be sustained. We set aside the same. 9. With regard to the finding that soda ash was not used in the production of craft paper, it is to be noted that this finding is contrary to statutory records, technical literature as well as the statement of company's Director. We find from the statement of Shri Ved Prakash that soda ash is one of the input of costs of the appellant. In these circumstances, the denial of Modvat credit on soda ash also cannot be sustained. As already noted, the duty demand of Rs. 1646/ under Sr. No. 4 is not being co....