Archana Wadhwa, J. - (1.)AFTER hearing both sides duly represented by Shri M.H. Patil, learned Advocate for the appellant and Shri S.S. Bhagat, learned SDR for the revenue, we find that Modvat credit of Rs. 25,200/ - has been disallowed to the appellant in respect of "Trolly Bin Hopper" on the ground that the same being material handling equipment cannot be considered to be modvatable goods. However, we find that the Tribunal in the case of CCE, Bhopal v. H.E.G. Ltd. - 2002 (51) RLT 434 (CEGAT -Del.) as also in the case of CCE, Salem v. Cheran Spinners has held that material handling equipments are eligible for the purpose of Modvat credit in terms of Rule 57Q. As such, we hold that such credit was admissible to the appellant.
(2.)DUTY of Rs. 50,400/ - has been confirmed in respect of quality control samples which were taken out of the production batch prior to the stage of accounting production. Appellant has referred to the Larger Bench of the Tribunal in the case of CCE, Chandigarh v. Dabur India Ltd. 2005 (66) R.L.T. 893 (CESTAT) laying down that control samples for laboratory test in factory and preservation for investigation of complaints are not chargeable to duty. As such, by following the ratio of the above decision, we set aside this demand also.
(3.)DEMAND of Rs. 2,905/ - stands confirmed against the appellants in respect of unexplained shortage of modvatable inputs detected at the time of physical stock taking. Shri M.H. Patil, learned Advocate submits that in view of small quantum of demand, he is not contesting the same. Accordingly, we confirm the said demand.
Demand to the tune of Rs. 27,99,394/ - stands confirmed in respect of shortages of raw material for the period December 1994 to March 1999. Shri Patil explains that various raw materials are used in the manufactured of break fast cereals manufactured by the appellants. At the start of the month itself, they make plan to manufacture cereals, based upon which, raw materials are issued. However, it may happen sometimes that actual production is more or less than the production plan requiring more or less raw materials. However, the entries in the record are also made based upon requisition slip, which, in turn are on the basis of the system plan of manufacture. The above system might have resulted in discrepancies which are settled in the personal ledger. However, he fairly agrees that no such adjustments are made in the statutory record but submits that entries made in the stock ledger would clearly reflective upon the fact that entire raw material was consumed by them in the manufacture of final product which was cleared on payment of duty and no such material was ever removed by them without payment of duty.