2011 (8) TMI 206

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....ture of Wire Enamel. He also admitted that the total quantity of Wire Enamel manufactured by using raw material would be 27,288.75 kgs and it is sold in the open market on cash basis without payment of Central Excise duty. One Shri Timir Basu, in his statement dt.16.12.02 given on behalf of Shri Ketan Jain (Partner) agreed with the depositions of Shri T.T. Thomas and thereafter, duty payable on the finished product that could have been manufactured by using raw material was paid. Proceedings were initiated against the assessee, 2nd appellant and the partner which culminated into confirmation of demand with interest, penalty on the second appellant and dropping of further proceedings on the partner. Assessee and second appellant are in appea....

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....ssan Thermoware, the appellants were manufacturing Water Jugs and one of the raw materials was found short when compared with the stock of RG 23A Part I register. Director admitted the shortage and also admitted that the water jugs were clandestinely removed without payment of duty and debited the duty amount in their MODVAT account immediately. The Tribunal took a view that since the balance of stock of other raw materials in statutory record was found correct and there was no discrepancy in stock of finished product and there was no independent evidence available on record indicating clandestine manufacture and removal and therefore, the demand for duty, penalty cannot be sustained. The appeal by the Revenue before Hon'ble High Court of G....

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....ty is payable when the goods are removed. Therefore, for demanding duty on the finished goods, at least there has to be some evidence of clandestine manufacture or removal and in this case and in the case of Nissan Thermoware Pvt.Ltd., there is absolutely no evidence available to show clandestine manufacture or removal. Further, the raw material which was found short is around 25% of the quantity of finished goods that can be produced. This will show that it is not the principle raw material.   5. Under these circumstances and in view of the decisions of the Tribunal cited by the ld.Counsel, in the case of Remson Industries Ltd. Vs. CCE Delhi 2007 (214) ELT 340 (Tri-Del), in the case of CCE Chandigarh Vs. Nachiketa Paper Ltd 2008 (2....