TaxTMI 
TaxTMI 
2017 (11) TMI 280
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.... been imposed. Since both the appeals have arisen out of common order, therefore they are being taken up together for decision. 2. The Appellant M/s Spin Packaging are engaged in the manufacture of Woven Fabrics of Polypropylene or blend of Polypropylene with HDPE, LDPE or LLDPE. They were importing raw material from abroad and were availing MODVAT Credit of the duty paid on inputs in terms of Rule 57-A of the Central Excise Rules, 1944. A Show Cause Notice dt. 2.11.2001 was issued to them alleging that during the visit of the Central Excise Officers on 06.12.1997 and during verification, the shortage of 31.158 MT of finished goods namely cut pieces of woven fabrics was found involving Central Excise duty of Rs. 3,11,580/-. Also shortage of 106.034 M.T. of input P.P. Granules involving MODVAT Credit amounting to Rs. 9,27,797/- was observed. It was also alleged that on further enquiry it was found that HDPE/LDPE/LLDPE granules so imported were neither received nor used in the production of final products by the Appellant Unit though they had taken the MODVAT Credit of the duty paid on these inputs. The officers also recorded the statements of Shri S.B. Jani, General Manager, Shri....
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....id documentary evidences had not been controverted by the Revenue by bringing any contrary material on record; the Revenue has not verified the facts of transportation from the truck owners/drivers though the details of Truck Numbers were provided to the Revenue. In absence of any evidence to show that the impugned inputs were not brought to the factory premises, the demand confirmed against them is not legal. The Adjudicating authority did not consider the documentary evidence and confirmed demand without conducting any verification on the ground that the information had been given for the first time after 3 years of issue of show cause notice. The evidentiary value of Bills of Entry towards import of inputs and Lorry Receipts of transport of the imported inputs from Ports to the factory premises does not get lost merely because the same were submitted with Reply to Show Cause Notice. The same were verifiable documents from the Customs Department. The Adj. Authority has erred in not taking cognizance of the documentary evidence. The allegation cannot be proved merely on the basis of statements unless the same are corroborated by independent evidence. He relied upon the decision in....
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....de for them. Moreover how and to whom the huge quantity of imported inputs were sold, transported and payment was received. He placed reliance on the decision in R.S. Enterprises V/s CCE, 2004 (177) ELT 473 wherein the MODVAT Credit was allowed as there was no evidence that the HDPE granules were either sold in the market as such or the Appellant had purchased some other granules which were allegedly used by the Appellant Company. He also relied upon the decision in the case of Brijmohan Sheokishan Vs CCE, 2003 (160) ELT 188. 4.2 As regard shortage he submitted that the demand of Central Excise duty was confirmed on the ground that the General Manager had accepted the shortage of fabrics. The Adjudicating authority did not appreciate the fact that the officers had taken stock only of the cut-pieces packed in bundles and had not taken into account the cut pieces weighing 3750 Kgs. which were to be packed and lying in loose form. Further, three consignment of cut woven fabrics had been dispatched under Invoices for 27,933 Kgs. on previous day i.e. 05.12.1997 which could not be entered into RG-1 Register as the Excise Clerk and Authorized Representative, Shri Mahesh Pimple was on m....
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....at the Affidavit has to be believed and cannot be brushed aside by merely saying it to be after thought. The Hon'ble Supreme Court in case of M/s Parle Beverages Pvt. Ltd. - 1990 (98)ELT 585 (SC) held that it is not correct to totally brush aside the affidavit and the invoices without going into the question whether the invoices were genuine and if thought fit the deponent could be called for cross-examination. 4.4. He also submitted that the raw materials were stored at 5 different locations in the factory premises and it was physically impossible to verify the huge stock by counting only the visible rows. The actual stock of raw material was 183.175 MT as against 113.675 MT mentioned in Panchnama. In addition, a quantity of 36.400 MT raw materials had been dispatched under 4 Challans under Rule 57F for job work in 4 Trucks whose numbers were mentioned in Challans. The Revenue, instead of verifying the fact from Job Workers as well as from truck drivers had discarded the documentary evidence labeling the same as afterthought. Once their quantities are taken into account, the actual balance of inputs comes to 183.175 MT as against the quantity of 183.309 MT shown as balance on 0....
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....d. Vs CCE, 2012 (286) ELT 615 as upheld by the Hon'ble High Court supra wherein it was held that the said statement alone cannot be made basis for arriving at the finding of clandestine removal in absence of other corroborative evidence on record. The Appellants had submitted copies of bills of entry along with Truck Receipts to show the receipt of goods in their factory which has not been held to be false or fictitious. Further no record of disposal of the goods elsewhere is appearing on records. In case of M/s R.S. Enterprises Vs CCE, supra relies upon by the Appellant the allegation against the assessee was that they did not actually used the various grades of granules. The Tribunal while dwelling upon the issue held as under: "3. We have considered the rival submissions and perused the records. We have also gone through the findings of the Id. Commissioner and also submissions made by the Id. SDR. We find that the Department has not been able to produce any evidence that the granules purchased by them were sold in the market. They have also not been able to produce any evidence to show that the granules which were allegedly used in the manufacture of the HDPE pipes wer....
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....econdly the opinion nowhere shows that cut woven fabrics cannot be manufactured by blending PP granules with HDPE/LDPE/LLDPE granules. On the other hand the Opinion itself states that addition of these materials reduces the cost of PP fabrics as those materials are cheaper by 30% in comparison to P.P. This clearly shows that the manufacturer can blend any of these materials with P.P. granules at the time of manufacture of woven fabrics to reduce the cost. We are thus of the view that the Revenue has not been able to establish that the impugned inputs were not used by the Appellants in the manufacture of their finished products. 8. As regard demand of excise duty on finished goods and raw material, we find that mere admission of shortages cannot ipso facto lead to conclusion of clandestine removal of such short found goods. We find that the Appellant from the very beginning had been disputing the shortages and the duty so deposited by them were intimated to have been deposited "Under Protest". The clandestine removal cannot be alleged only due to shortages in stock. The Revenue has not rebutted the documentary evidence produced by the Appellants. The Appellant on very next day of....