TaxTMI 
TaxTMI 
2016 (9) TMI 80
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....materials required for the manufacture of plywood are face veneer, core veneer, chemicals like phenol, formalin and resin/glue etc. Value wise, the cost of glue /resin will be about 20% of the total value of plywood. 2. The appellants avail the facility of Modvat on the inputs used in the manufacture of plywood which is utilized towards payment of duty at the time of removal of the finished goods in their factory. In November, 1999, the appellants were directed by the Superintendent of Central Excise, Bhimili Range Officials to maintain a raw material account in form -IV and were also directed to make the register up-to-date by posting all the entries since the inception of the unit. At the time of visit, the officials recovere....
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....,89,760/- - Demand of duty unaccounted production after Discounting wastage and stock in process and Considering the average price of plywood - Rs.8 78 413/ Total Rs.12 68 173/- Being aggrieved, the appellants have filed the present appeal before the Tribunal. 4. The appellants were issued with periodical show cause notices (3 nos) demanding excise duty of Rs. 14,62,376/- for the period 16-12-2000 to 31-03-2004, on allegations made similar to the previous period. The said show cause notices were adjudicated by the Adjudicating authority vide order dated 04-06-2004 and dated 27-09-2004. Being aggrieved therein, the appellant preferred appeal before the Commissioner (Appeals) and Commissioner (Appeals) vide Order-in-Appeal....
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....e, when face veneer is not a principal raw material prescribed by the department in the manufacturing process, the attempt of the department to estimate total production by relying on the consumption of face veneer is totally illegal and unscientific and is consequently required to be set aside. The appellants relied on the following decisions. - Dalmia Vinyl & Others vs CCE, reported at 2005(192) ELT 606 - Sapthagiri Cements & Others Vs CCE, reported at 2005(183) ELT 385. 6. The learned AR reiterated the findings in the impugned order. He submitted that the demand, in this case, is related to non-accountal of the basic raw materials for manufacture of plywood, namely the face veneers and the core veneers. The ass....
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....nal Order No.21477/2015, dated 14-08-2015 after analysing the facts, evidence and law in detail has held the issue in favor of assessee. The relevant portion of the order is reproduced as under: "3.1 Learned counsel for the appellant submitted that the entire demand is based on assumption that 2 sq. mtrs. of face veneer is required for manufacture of 1 sq. mtr. of plywood. This assumption has been made on the basis of statement of Accountant of the appellant who also did not clearly admit that this the quantity is required for production. The whole case is based on the statement of Shri P.K. Dash, Accountant. Learned counsel took us through the answers given by Shri P.K. Dash. In response to the Question No. 6, Shri P.K. Dash stated ....