2023 (12) TMI 603

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.... Recycling Limited (E/55937/2013) assail the Order dated 14.12.2012, passed by the Commissioner of Central Excise, Ludhiana, vide which Central Excise duty of Rs.89,28,473/- was confirmed along with interest and equal penalty and penalty was also imposed on M/s Kailash Steel and Alloys, Ludhiana (appellant No.2, E/56273/2013) under Rule 26 of the Central Excise Rules, 2002. 2. Brief facts of the case are that the appellant No.1 is engaged in the manufacture of alloy and non-alloy steel ingots/ billets; two showcause notices dated 08.07.2011 and 27.01.2012 were issued to M/s Allied Recycling Limited alleging that credit availed on rolled products/ rounds and HR coil/ sheets is not admissible to the appellants on the ground that they are not....

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.... cleared by the appellants; learned Commissioner failed to appreciate that the impugned raw material i.e. HR sheets etc. were used in a very small proportion; comparing the price of the final products with the price of a minuscule quantity of inputs is bizarre; Commissioner did not appreciate the cost data certified by a Cost Accountant which shows that the finished goods were sold at a profit; he did not also consider the average price of the input which was around Rs.19,113/- to Rs.24,640/- during the period 2006-07 to 2010-11, whereas the price of the final products varied from Rs.19,323/- to Rs.25,309/- during the same period. 5. Learned Counsel further submits that when the officers visited the factory of the appellant on 28.09.2010, ....

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.... based on an audit objection; he relies on Tamil Nadu Housing Board - 1994 (74) ELT 9 (SC); Oudh Sugar Mills Ltd. - 1978 (2) ELT J172 (SC) and Gian Mahtani - 1999 (110) ELT 400 (SC) and submits that penalty cannot be imposed when there is no intent to evade payment of duty and cannot be imposed on the basis of assumptions and presumptions in the absence of proof; Rule 26 has been amended w.e.f. 01.03.2007 and before this period, penalty cannot be imposed for receipt of invoices without accompanying goods. 7. Shri Kulwinder Singh, learned Counsel for appellant No.2, submits that penalty cannot be imposed on appellant No.2 as they have supplied the goods; transportation was arranged by their buyers and payments were received through banking ....

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....oned taking into account all the raw material, labour, consumables, other expenses etc. in a holistic manner; the analysis given by the Cost Accountant has not been considered by the Adjudicating Authority. Therefore, the findings of the Adjudicating Authority on the point of the price of the raw material being higher than the final products are not legally tenable. 11. Moreover, the appellant's claim that the HR coil/ sheets were seconds and have been used to make "formers" which are used to hold the material together in the induction furnished; the "former" itself gets melted; therefore, there is no reason as to how the claim of the appellants can be discounted. We find that CBEC vide Circular No.690/6/2003-CX dated 21.02.2003, clarified....