TaxTMI 
TaxTMI 
2018 (12) TMI 1100
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the manufacture of various kinds of Railway and Auto Parts, viz.- Brake Shoes, etc. for two wheelers falling under Chapters 84 and 87 of the first Schedule to the Central Excise Tariff Act, 1985. 3. Respondents filed declaration for availing exemption under Exemption Notification No.50/2003-CE dated 10.06.2003 for the first time on 12.10.2006. As declared in the declaration dated 12.10.2006, the appellant purchased brake shoes and batteries in finished condition from the manufacturers and was clearing them from their factory after doing fresh packing. Notification No.50/2003-CE dated 10.06.2003 was amended by Notification No.01/2008-CE dated 18.01.2008 which provided that the exemption contained in the Notification No.50/2003-CE dated 10....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat two grinding machines were installed but no operation was going on such machines. Further, no records of dust/scrap generated during the process of grinding of the Brake shoes was found. Officers claimed that since grinding fixture was purchased only on 22.04.2010 from M/s Magnum Auto Motive Industries, Noida, which was essential for grinding of Brake Shoes, the grinding process before 22.04.2010 was not possible. 6. Accordingly, a show cause notice bearing C. No. IV-CE(9)/CP/M-II/Escorts/39/11/5294 dated 21.05.2012 was issued to the respondents which was adjudicated by Order-in-Original No. 31/Addl. Commissioner/M-II/2013-14 dated 31.12.2013 confirming the demand of duty Rs. 21,63,978/- along with interest and equal amount of penalty ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hoe did not exist in the appellant's unit merely on the basis of non operation of the unit on the particular day or non availability of burnt dust/scrap. It is an accepted fact that the officers of the Department visited the unit of the appellant on 19.07.2011 i.e., more than 2 years after the assessed informed the department about availing the exemption whereas the last operation of production of brake shoes concluded on 16.07.2011. I also observe that Department failed to negate the claim of the appellant that he never sold the said dust/scrap and had transferred the same to scrap yard in the factory. Thus non availability of burnt dust after three days does not prove that there was no production of the goods. Appellant has produced the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....them instead Sh. Rajat Agarwal, partner of M/s Magnum, in his statement dated 29.08.2011, has confirmed the supply of ungrounded brake shoes from November 2008. I also agree with the contention of the appellant that the department was at liberty to take samples of the said unfinished brake shoes supplied by M/s Magnum and get them tested to discover the truth about their unfinished or finished condition. But the department neither took any action against M/s Magnum for violation of the Central Excise Rules, 2002 and nor were the samples taken and tested to ascertain the facts. Accordingly, I find that there is no conclusive evidence to establish that the appellant was not engaged in the grinding of the brake shoe. Thus I hold that the appel....