2010 (10) TMI 131

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....t confirmed the demand of excise duty of Rs. 23,04,994/-. The appellant is a cement factory. It was engaged in the manufacture of Portland cement classified under Chapter sub-heading 2502.29 of the Central Excise Tariff Act. It also possessed a valid central excise registration certificate. Being a SSI unit, the appellant availed the exemption benefits in Notification No. 175 of 1986 dated1-3-86as amended, by which the appellant was availing the concessional rate of excise duty for the units which used clinkers. There was an inspection of the appellant's unit by the Central Excise Headquarters Preventive Officers on20-7-93. Based on the said verification, the officers concluded that the physical stock of clinkers available was only 123.500 ....

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....al holding that the appellant was entitled for the benefit of the Notification No. 24 of 1991 and the hollow blocks manufactured were not dutiable and were exempted. The first respondent also deleted the penalty imposed under Section 11-AC of the Central Excise Tariff Act (sic). The duty leviable was therefore restricted to Rs. 13,04,994/-. Aggrieved against the said order of the first respondent dated13-9-2002, the appellant has come forward with this civil miscellaneous appeal. 3. We have heard Mr. K. Jayachandran, learned counsel for the appellant and Mr. S. Udayakumar, learned senior panel counsel for the respondents. 4. We are only concerned with the abnormal shortage of clinkers which, according to the respondents, res....

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....e learned standing counsel for the respondents, we find force in the submission of the learned standing counsel for the respondents. In paragraph 14(ii) of the Order-in-Original No. 15 of 1996, the names of the officers who were present at the time of inspection have been specifically noted. The officers whose statements were recorded and who pleaded their ignorance for the shortage in clinkers have also been noted. The original authority made a specific reference to the assessee's letter dated23-7-93, wherein the appellant disputed the manner in which the stock of clinkers was taken, but there was no explanation for its silence between20th July, 1993and23rd July, 1993. The said observation of the original authority is quite convincing and ....

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....d no answer at all. Admittedly, the manufacture of Portland cement is made by using limestone, clay, coke breeze and gypsum. It is stated that the limestone and clay are mixed in appropriate proportion, which is the raw material, and the raw material is charged with coke breeze and fired in a vertical shaft kiln and the clinker is manufactured. Thereafter, the clinker is mixed with gypsum and the resultant product is called Portland cement. Therefore, when the limestone is the basic raw material which is used for the manufacture of clinker and thereafter for the manufacture of Portland cement, it was incumbent upon the appellant to have satisfactorily explained the missing quantity of clinkers to an extent of 1214.579 metric tons. It is qui....