- (1.) The two writ petitions are identical on facts and involve a similar controversy as to whether petitioners are entitle to exemption of excise duty to the extent of 0.5% of tolerance limit on the production of aerated and mineral water as provided by C.B.E. & C. Circular dated 8-9-1971 as reiterated and modified vide circular dated 17-9-1975 on account of the breakage of bottles during handling and movement. The facts in brief are narrated below.
(2.) Petitioners are engaged in manufacturing of aerated waters etc. which are excisable items under the Central Excise Tariff Act, 1985.
(3.) Petitioners availed CENVAT credit in respect of 0.5% of the finished goods on account of loss due to breakage in handling as per the above circulars and when the petitioners on being asked to reverse the CENVAT credit, refused to abide, they were served with show cause notices dated 23-5-2008, 1-8-2008 and 3-11-2008 by the Joint Commissioner, Central Excise, Meerut-2 to show cause as to why a sum of Rs. 15,64,299/- and Rs. 1,08,080/- for the period June 2002 to June 2007 and July 2007 to September 2007 respectively may not be recovered as excise duty on the said 0.5% of the aforesaid excise goods under Section 11A read with Section 11AB of the Central Excise Act, 1944.;