- (1.) Rakesh Kumar, Member (T)
(2.) THE facts leading to filing of these appeals are in brief as under: - - 1.1 The appellant are manufacturers of aluminium conductors, the raw material for which is aluminium wire rod. On 25 -11 -1999 search of their factory premises was conducted by the jurisdictional central excise officers in the course of which stock taking was conducted of the finished as well as modvat credit availed raw -material was conducted. While there was no discrepancy in the stock of the finished goods, there was shortage of 1670 Kg. in the stock of modvat credit availed wire rod involving modvat credit of Rs. 81,937/ -. Search of the factory also resulted in recovery of assessees copy of an invoice dated 24 -11 -1999 issued to M/s. Dicco Conductors under which 4272Kg. of aluminium wire rods had been cleared, but till 25 -11 -1999 the modvat credit involved on this quantity of wire rods had not been debited. The Modvat credit involved on this quantity of the aluminium wire rod was Rs. 61,034/ -. Subsequently, the quantity of the wire rods totally valued at Rs. 3,81,462/ - cleared to M/s. Dicco Conductors were also seized for having been cleared without reversing the cenvat credit. In the course of search of factory premises, certain weighment slips were also recovered from some employees. These weighment slips were in respect of total quantity of 22.015 MT of aluminium scrap involving central excise duty of Rs. 2,11,344/ - and 29.265 M.T. aluminium wire rod involving modvat credit of Rs. 4,01,223/ - which appeared to have been cleared without payment of duty/reversal of modvat credit. Since the departmental officers found certain incidents of clearances of modvat credit availed aluminium wire rods as such without reversal of the credit, they enquired into the actual consumption of the aluminium wire rods by the appellant during 1995 -96, 1996 -97, 1997 -98, 1998 -99 and period till 24 -11 -1999 to 1999 -2000. The appellant during this period were manufacturing stranded aluminium conductors consisting of aluminium wire of various diameters. The departmental officers in this regard estimated the quantity of aluminium wire rods consumed on the basis of mass per K.M. of the aluminium wire of different diameter as given in the ISI standard IS 398 for the aluminium alloy standard conductors and on this basis they estimated the consumption of aluminium wire rods by taking into account the quantity of scrap which have been cleared as per the records and the quantity of aluminium wire rod cleared as such. By calculating the consumption of aluminium wire rods during each financial year, the officers compared this consumption with the consumption as recorded by the appellant in their record and on this basis it has been alleged that during the period of dispute i.e. period from 1 -4 -1995 to 24 -11 -1999, the appellant company has clandestinely cleared 782.436 MT aluminium wire rod involving cenvat credit of Rs. 91,57,546/ - without reversing the credit. It is on this basis that the Commissioner vide Order -in -Original dated 31 -5 -2004 - (a) confirmed the modvat credit demand of Rs. 91,57,546/ - on 782.436 MT aluminium wire rods alleged to have been removed clandestinely during the period from 1 -4 -1995 to 24 -11 -1999 along with interest thereon under Section 11AB and imposed penalty of equal amount on the appellant under section 11AC; (b) ordered confiscation of 4472 Kg. of aluminium wire rod valued at Rs. 3,81,462/ - cleared to M/s. Dicco Conductors without reversal of the modvat credit with option to redeem on payment of redemption fine of Rs. 3.5 Lakhs and beside this imposed penalty of Rs. 2.00 Lakhs on the appellant company on this count, (c) confirmed central excise duty demand of Rs. 2,11,344/ - on alleged clandestine removal of 22.015 aluminium scrap and modvat credit demand of Rs. 4,01,223/ - in respect of alleged clandestine removal of 29.265 M.T. of aluminium wire rods without reversing modvat credit and since the appellant had already paid this amount ordered the appropriation of those amounts against this demand and (d) imposed penalty of Rs. 20.00 Lakhs under Rule 209A of the Central Excise Rules, 1944 on Alok Sharma, Managing Director, penalty of Rs. 2.00 Lakhs on Shri K.J. Joseph, Works Manager and penalty of Rs. 1.00 Lakh on Shri S.K. Kurup, Authorised Signatory of the appellant company. Against this order of the Commissioner, these appeals have been filed. Heard both the sides. Shri Rupesh Kumar, Advocate, the ld. Counsel for the appellant, pleaded that he does not contest the order of confiscation of 4472 Kg. aluminium wire rod valued at Rs. 3,81,462 cleared to M/s. Dicco Conductors without reversal of the modvat credit, that he also does not contest the central excise duty demand of Rs. 2,11,344/ - in respect of clandestine removal of 22.015 M.Ts. of scrap and Rs. 4,01,223/ - in respect of clandestine removal of 29.265 M.Ts. of aluminium wire rod as the same have already been paid by the appellant that he is contesting only the modvat credit demand of Rs. 91,57,546/ - on 782.436 M.Ts. of aluminium wire rods alleged to have been cleared clandestinely without reversal of the credit during the period from 1 -4 -1994 to 24 -11 -1999, that there is absolutely no tangible evidence produced by the department in support of this huge demand of modvat credit, that the modvat credit demand and the allegation of clandestine removal of modvat credit availed aluminium wire rod is based on weight per K.M. of the stranded aluminium wires of different diameters as mentioned in the ISI standard IS398:1994, that the weight in terms of KM per K.Ms. given in table 2 of the IS 398 are only approximate weight based on the nominal diameter, that the table itself mentions along with the nominal diameter, the maximum diameter as well as the minimum diameter, and the maximum diameter can be 1% more than the nominal diameter and the minimum diameter can be 1% less than the nominal diameter, that when the ISI standard itself mentions the weight per K.M. of the stranded aluminium conductors of different diameters as approximate weight and the same cannot be applied to every case, that as per the chart for different financial years prepared by the department, the actual consumption of aluminium wire rod is less than the consumption based on the maximum mass per K.M. for the financial year 1996 -97, 1997 -98, 1998 -99 and 1999 -2000, that only for the financial year 1995 -96, the actual consumption of aluminium wire rod as per the appellant's record - 1395.828 M.T. is more than the maximum mass per K.M. based on the maximum diameter - 1370.583 M.T., that even for 1995 -96, while the actual consumption of the aluminium wire rods excluding the scrap and the quantity of wire rod cleared as such is 1334.243 M.T. the maximum consumption based on maximum mass per K.M. can be 1349.942 MTs, that merely on the basis of the mass per K.M. for the standard wire of different diameter given in table 2 of the IS398:1994, the allegation of inflating the consumption of aluminium wire rods and the clandestine removal of modvat credit availed wire rods without payment of duty cannot be made, that in this regard the appellant rely upon the Apex Court's judgment in the case of Oudh Sugar Mills v. Union of India reported in, 1978 (2) E.L.T. (J 172) (S.C.), wherein the Apex Court held that without any tangible evidence on record, the allegation of duty evasion by clandestine removal based only on the calculation of the raw -material fed into the process or on the working of the machinery as noticed during test inspection is not sustainable, that same view has been taken by the Tribunal in the case of Klene Parks Ltd. v. CCE, Bangalore -I reported in, 2009 (247) E.L.T. 271 (Tri. - Bang.) and also in the case of Ghodavat Pan Masala Products Ltd. v. CCE, Pune reported in : 2004 (175) E.L.T. 182 (Tri. -Mum.), and that in view of the above submissions, the impugned order confirming the modvat credit demand of Rs. 91,57,546/ - and imposing penalty of equal amount on the appellant company and imposing penalty of Rs. 20.00 Lakhs on Shri Alok Sharma, the Managing Director, is not sustainable.
(3.) SHRI Yashpal Sharma, ld. DR, defended the impugned order by reiterating findings of the Commissioner and pleaded the fact that on 24 -11 -1999, 4472 KG of aluminium wire rods had been cleared to M/s. Dicco Conductors without reversal of the credit shows that the appellant were regularly clearing modvat credit availed aluminium wire rods without reversal of the credit/payment of duty, that though the clearance of 4472 KG aluminium wire rod 24 -11 -91 to M/s. M/s. Dicco Conductors was under an invoice, this invoice No. 146 had not been issued from the invoice book which was being used but had been issued from another invoice book, that similarly, the clearance of 29.265 M.T. aluminium wire rods involving modvat credit of Rs. 4,01,223/ - which is evident from the weighment slips recovered from an employee of the appellant factory, also supports the allegation that the appellant were engaged in clandestine removal of modvat credit availed wire rods without payment of duty, that the appellant have not given any satisfactory explanation for the difference between the consumption of aluminium wire rods based on the consumption norms mentioned in the ISI standard and the consumption of aluminium wire rods recorded by them, that from this it is clear that the consumption of aluminium wire rod has been inflated and the unaccounted wire rods had been cleared clandestinely and that in view of the above submissions, there is no infirmity in the impugned order.;