TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 401
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....s of the appellants. It was contended in the show cause notice that the appellants have suppressed the production on which no Central Excise duty was paid as the appellants have not properly accounted for the actual production and discharged the appropriate duty due thereon. The adjudicating authority while adjudicating the show-cause notices dated 09.03.2004, 11.01.2005, 22.09.2005 and 04.04.2006 dropped the entire proceedings. Being aggrieved by that order-in-original dated 20.10.2006, Revenue filed an appeal before the Commissioner (Appeals) who vide impugned order set aside the original order and allowed the Revenues appeal. In another set of proceedings related to Appeal No.E/167/09 on the same issue Asst. Commissioner vide order-in-original No. SS/Adj/12/CH-II/2005-06 dated 29.02.2008 confirmed the demand following the earlier order-in-appeal dated 07.12.2007 and the said order-in-original dated 29.02.2008 was upheld by the Commissioner (Appeals) in the impugned order dated 28.11.2008. The other 3 appeals are on the issue of refund of duty paid in the case on same issue that is of differential quantity of goods found from Excise records and Laboratory records of the appellant....
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.... continuing their practice of recording the estimated quantity in the lab register and the actual quantity by taking the aggregate weight of the packaged product in heir production records as usual, even after the observation and service of the SCNs. This fact reveals the consistent practice adopted by the assessee. However, the reasons for the practice followed and. the relevance of the quantity recorded in the lab register for the purpose of demanding duty, needs detailed analysis. It has to be admitted that the practice of recording the quantity. of their production at bulk stage and after packing, despite the audit objection, does not indicate any defiance to the provisions of law as mentioned in the periodical SCNs. I find that the demands are merely based on the said discrepancy in the quantity shown between lab register and the production register and there is absolutely no other evidence to allege clandestine removal of the said differential quantity, as contended by them. 20. Now the main issue before me for consideration is whether duty can be demanded on the said differential quantity. Other proposals in the SCN i.e. for demanding interest on the allegedly short- paid ....
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....at bulk stage neither can be accurate nor can be the basis for raising the demand, with out any evidence of clandestine clearance, 23. Further, it is of common knowledge that the 'Fevicol' a synthetic organic adhesive gets set or hard, on exposure to atmosphere and becomes a waste. I am convinced with the assessee's claim that a minor quantity of the product becomes waste at the filling stage due to the spillage. The spillover quantity, although negligible, is an irrecoverable loss, which certainly contributes to the variation in the quantity, as compared to the bulk quantity. 24. The quantity of the adhesive which was irrecoverably lost on account of spillage at the filling stage, also do not attract any Central Excise liability, since such irrecoverable loss is a part of the manufacturing process of their packaged commodity. The quantity of such loss also can neither be accounted for nor the assessee need to seek any order of remission of duty under Rule 21 of Central Excise Rules, 2002. 25. The above two reasons i.e the possible error in the estimation of the product at the bulk stage and spillage at the time of filling, themselves convincingly explains the rea....
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.... ------- VI. 500 to 1000 ----------- 15 vii. 1000 to 10000 1.5 -------- viii. 10000 to 15000 . ------------ 150 ix. More than 15000 1.0 ------ 29. As per the Net Weight Checking Reports, the weight of the product ranges from 10 - 50 gms. Hence the permissible variation is to the extent of 9. Therefore, even the highest variation to the extent of2.6, as shown in the Table-Il, is within the tolerance limits under the SWMR. 30. The Net Weight Checking reports generated within the factory of the assessee, to ensure that the desired weight is filled in the unit containers and to meet the requirements under Standard: Weights and Measurement Act (packaged commodities) (1977), also reveals that the net quantity filled in about 1-2 of the material more than the quantity mentioned on the unit package. The' reasons offered for filling a little excess quantity over and above the quantity mentioned on the unit containers i.e, to avoid violation of Standard Weights and Measurements Act, 1977 and also to gain confidence and goodwill of the customers, not only sounds logical but also is supported by the Net Weight Checking Reports.....
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....the same, irrespective of the actual quantity i.e. whether it is 20.5 gms. in the unit pack of 20 gms. or 19.5 gms, since the said MRP remained. the same. There have been no short payments of duty on the said goods, as the MRP and the assessable value remained the same irrespective of the actual quantity, containers in the unit packages of the goods. 34. I, therefore, hold that the demand in proportion to the excess quantity filled in the unit packages, which obviously falls within the tolerance limits prescribed under Standard Weights and Measurement Act / Rules, for the above mentioned reasons, cannot be enforced, 35. I also accept the assessee's contentions that the department has not put forth any other evidence in support of the demand alleging clandestine removal. As I have already mentioned above, the entire demand is merely based on the discrepancy between the quantity shown in lab register and the quantity recording in the production records. Therefore, in the absence of any corroborative evidence, the demand cannot be raised on such differential quantity, particularly, when the difference has been well justified, in the above terms. I agree with the assessee's ....
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....ss the following order ORDER I drop all the proceedings contemplated in the following SCNs against M/s. B. Ramchandra & Company, Mumbai : TABLE-IV S. No. SCN No. & Date Period Duty Demanded IN RUPEES REMARK BED Educational Cess TOTAL 1 VIPIICASE 12(A)-60fTF-1/03 9.3.04 1.2.99 to 31.12.03 921381 Nil 9,21,381/- De Nova 2. V.Adj 1 SCNI BRl39/Ch.1I/04-05 dt. 11.1.05 1.1.04 to 30.11.04 242743 2163 2"44,906/- De Nova 3: V.Adj/SCNI8R/39/Ch.1I1 04-05 22.9.05 1.12.04 to 31.7.05 190316 3806 1,94,1221- De Nova 4. V.Adj.(B.Ram)3-1/Ch,11I06-07 24.4.06 dt. 1.8.p5 to 31.1.0~ 224097 4482 2,28,579/- Fresh 4.2 Against the above findings of the adjudicating authority, Commissioner (Appeals) has in a very short cut manner set aside the order by giving a very hypothetical and cryptical finding which is reproduced below:- "I have gone through the case records and considered the rival contentions. The authority's finding that there may be be extra filling in the tubes was not supported by independent evidence. The respondents had only produced Net Weight checking reports prepared by their own staff and supported by statement of empl....