2009 (1) TMI 226

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....received back from the job workers contained 4 to 5% of aluminium, magnesium and other allied materials in smaller quantity but the quantity of alloy zinc received by the assessee was equal to the quantity of special high grade zinc supplied by them to their job worker. Thereby the job worker retained the quantity of the zinc equal to the quantity of other materials added by them for converting virgin zinc to zinc alloy. On this basis it was found by the revenue that the appellants availed excess amount of MODVAT credit in respect of zinc to the extent of 3% after allowing 1.5% as burning loss and excess credit availed thus came to Rs.1,42,535/- during the period from August 1989 to September 1993. This is the second round of litigation and....

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....ods for job work and even though he does not have a copy, he submits that the Assistant Commissioner had given a permission vide his letter V-Ch 79(30)/109/86 dated 6-9-1986. He also drew my attention to the copy of the challans which shows that high grade zinc was sent for job work and alloy was received which would clearly show that the department could not have been unaware of the fact that in view of the fact that unit was audited several times by internal audit and twice by the audit of Accountant General during the period. He cited Agarwal Brothers Steel Rolling Mills v. CCE reported in 1987 (27) E.L.T. 334 (Tri.) in support of his contention that assessee cannot be held liable for suppression of facts when the department has knowledg....

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....ssions made by both the sides. First of all as rightly pointed out by the learned Advocate, the appellants did not derive any extra benefit by following a wrong procedure. Since the deemed credit on aluminium was higher than zinc, the appellants could have got higher amount of CENVAT credit if they were to follow proper procedure and sent zinc and aluminium to the job worker after availing the credit and if they were to pay duty on the zinc waste or disposed of the zinc waste properly as per procedure they would not have lost any money. Further during the period under consideration, there was a permission required for removal of goods for job work and therefore it cannot be said that department was not aware of the fact of removal. Even tho....