TaxTMI 
TaxTMI 
2008 (4) TMI 80
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....lients in respect of five appeals. A copy of the submissions is annexed to this order in Annexure A for ready reference. The main ground taken by the appellant assessees is that similar cases where demands were confirmed on same set of allegations have been decided by the Tribunal earlier as in the case of M/s Delta Plastics & Anr. v. CCE., Kolkata I - 2003 (56) RLT 85 (CEGAT-Kol.) and in several other cases and since the department has not gone in further appeal against those orders of the Tribunal, the present demands have to be set aside following the ratio of those earlier CESTAT Orders. In respect of one appeal, where the department has filed the appeal, the respondent assessees contend that since the adjudicating Commissioner has followed the cited earlier decisions of the Tribunal, his order requires no interference. 3. As can be seen from Annexure A, the appellant assessees have also taken other independent grounds in their submission. 4. Shri N.C. Roychowdhury, ld. Sr. Advocate appearing on behalf of the department acknowledges that the department has not gone in appeal against the earlier order of the Tribunal. However, he supports the reasons based on which the imp....
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....n exercise of his statutory powers under Section 35E of the Central Excise Act, 1944. Let it not be forgotten that the CESTAT is a higher authority than the Board as evident from Section 35B(1) (C) of the Central Excise Act, 1944 empowering it to hear appeals against the orders of the Board. It does not behove the ld. Member of Board to question and criticize the understanding of the CESTAT while reviewing the adjudicating Commissioner's order. It is deplorable that even though the Board was aware of the contrary orders of the Tribunal, it took no steps whatsoever to safeguard revenue interest and file appeals against the same in the appropriate higher judicial forum and yet chose to criticize the same while passing a statutory review order. It also shows a major lacuna in the functioning of the Department as it does not seem to know how to go about ensuring its own interest in cases involving high revenue stakes. 7. In view of the fact that the earlier orders of the Tribunal have not been appealed against by the Department, we have no option but to hold that the adjudicating Commissioner was wrong in not applying the ratio of those decisions and confirming the duty and penalty ....
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....no evidence or material whatsoever that save and except the granules on which Modvat credits were taken by the Appellant, any other granules were ever received at its factory for manufacture of the pipes supplied to DOT. (e) The said granules which were the Appellants' raw materials and the said pipes which were their final products were all along duly covered by the Modvat Scheme and the notifications issued thereunder. (f) All required procedural formalities under the Modvat Scheme were always duly complied with by the Appellant. 4.2 In the order passed by the Commissioner there is no material or evidence or basis to show that the Appellants ever received any other granules for manufacture of their final products or that the granules on which Modvat credits were taken by the Appellants were not received at the factory or were ever cleared from the factory as such. Admittedly, the final products in question were manufactured at the Appellants' factory and were cleared therefrom on payment of duties. The said final products could have been manufactured only out of the said granules purchased by the Appellant and on which the said Modvat credits were taken by it. 4.3 It ....
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....ny granules were cleared from the factory of RIL without payment of duty. Thus, obviously, if the granules of Grade Relene E 41003 were to be procured by the Appellant, this could be only done either from RIL or from its distributors/dealers and even in that situation, the Appellant would have taken Modvat credit of the duties paid on the said granules of Grade "Relene E 41003". 6.5 It is absurd to suggest that even though the Appellant received duty paid granules of Grade "Relene E 41003", it did not take Modvat credits on the said granules but took Modvat credits on the granules of some other grades which were not used by it. The wholly untenable nature of the said allegation would be evident from the fact that it is based on the following baseless and unfounded assumptions and presumptions: (a) Assumption No.1- The Appellant must have received HDPE Granules of Grade "Relene E 41003". The Officers of DGAE(CE), Kolkata Zonal Unit had searched the Appellant's factory and had seized various records, registers and documents and had thereafter conducted thorough investigations. There was no evidence or material whatsoever to even remotely support any such allegation. Even in ....
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....acture of pipes, there can be absolutely no scope to disallow the Modvat credits on such baseless and unfounded assumptions and presumptions. 6.7 The aforesaid position has in fact also been admitted by the Commissioner himself in the impugned order. In the said order at internal Page 13 of the impugned order, the Commissioner has held as under - "Following are the points, which have mainly been stressed in the Hon'ble CESTAT's decisions in the case laws relied upon by the said assessee :- (I) The Department has not been able to produce any evidence that the granules purchased by them were sold in the market. (H) 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 were purchased by the appellants from a particular person, specially the small scale industries, which are exempted from payment of duty. I also understand that such evidences could not be produced by the department before me. Having full regard on the above two points observed by the Hon'ble CESTAT, I proceed to give my findings on the instant matter keeping in view the principles of Modvat rules, whether the specifi....
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....Pipes conforming to DOT Specifications can be manufactured by blending various grades of HDPE Granules in different proportions. Thus, this letter of RIL relied by the Department in fact strikes at the very basis of the Department's case and totally uproots the same. 7.4 Re: Letter dated 7-10-99 of IPCL - This letter of IPCL was also annexed to the Show Cause Notices. In the said letter, it was clearly stated by IPCL that "blending of various polymer resins sometimes improve the processing and quality of the end product". 7.5 Letter dated 29-3-2001 of M/s. Gas Authority of India Limited - The said letter was also annexed to the show cause notices. GAIL in its said letter categorically stated that the applications of its products are furnished only as a guideline and that the materials can be used for overlapping applications depending upon the blend composition in order to meet the final product performance requirement. GAIL further stated that its customers, based on their applications and practical trials with the grades, develop their own preference of grades to suit characteristics and performance of end products. 7.6 Thus, the manufacturers of the said granules ....
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.... MFR of the granules used by the Appellant were quite near to the required parameters and by proper blending/mixing, the required parameters were easily achieved. 8.3 The aforesaid position was also fully clarified by the Appellant's representative in his statements recorded by the Central Excise Authorities. In the said statement of Sri Ashok Kumar Bajoria, he had inter alia clarified as under - "The raw materials purchased by us are of various grades but after processing we are sure it meets the specified density and MFR (Answer to Question No. 9) "Fact is that HDPE Pipe grade material is not always available and we have also used HDPE Pipe Grade material at times when they are available and as mentioned earlier, that as pipe as per specification can be manufactured from the other grades, we do not wait for the pipe grade material to be available as we have deadlines to meet" (Answer to Question No. 15) "The processing involves a lot of parameters. Like addition of carbon black for one. Other parameters are application of temperature of different settings at different zones of extrusion and also the extent of cooling etc. We get sure about the property of the mater....
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.... and complied with all required statutory formalities. (b) For availing the Modvat credits the Appellant duly filed its Modvat Declarations and complied with all the required procedural formalities. (c) All consignments of granules were received at the Appellant's factory under cover of proper documents evidencing payment of duties thereon and the Appellant took Modvat credits only of the duties actually paid on the goods as per such documents and not a penny more. (d) The duty paying documents were regularly being filed with and/or examined by the Central Excise authorities. In fact, the duty paying documents in respect of the said granules received at the factory were also defaced by the jurisdictional Central Excise authorities after being fully satisfied in the matter. (e) Proper entries in the Appellant's Modvat Account about receipt of raw materials as well as the duties paid thereon were duly made. The Appellant's said register was also examined and initialled on several occasions by the Central Excise authorities. (f) Monthly Returns in Form RT-12 alongwith the Central Excise Invoices/Bills of Entry relating to the said granules received by the Appellant w....