MANALI PETROCHEMICALS LTD. Vs. CCE

JUDGEMENT

(1.) THIS appeal is directed against the Order -in -Appeal No. 79/2001 (M -I) dated 26.12.2001 passed by the Commissioner of Central Excise (Appeals) Chennai whereby the Commissioner has held that there was no infirmity in the order of the original authority and hence he has rejected the appeal of the appellants.

(2.) BRIEF facts of the case are that the appellants are engaged in the manufacture of Polyol Glycol etc. failing under Chapter heading 28 and 29. Appellants were alleged to have (i) cleared samples drawn from the Drumming Plant to the R and D Section within the factory for testing (ii) final products and inputs on which modvat credit was availed were cleared for test purposes, outside the factory (iii) Nitrogen was cleared for non -plant and non -manufacturing purposes within the factory premises. Show cause notice was issued proposing to demand duty in terms of the proviso to Section 11A (1) and the show cause notice culminated in the order of adjudication passed by the original authority by his order dated 26.2.2001 by which he has confirmed a duty demand of Rs. 92.464 towards samples cleared to their lab and R and D department under proviso to Section 11A(1) of the CE Act, 1944. He has also confirmed a duty demand of Rs. 20,430 on the raw materials cleared as samples outside their factory under proviso to Section 11A(1) of the Act. He has also confirmed a duty demand of Rs. 3,12,935 on Nitrogen manufactured and cleared for non -plant and non -manufacturing activities under the proviso to Section 11 A(1) of the Act. He has also appropriated the sum of Rs. 92,464 debited by the appellant vide Sl. No. 1044 dated 27.8.99 and another sum of Rs. 20,434 debited vide PLA Sl. No. 1301 dated 22.9.99 towards the duty amounts. The appellants were also imposed mandatory penalty of Rs. 4,91,421 under Section 11 AC and penalty of Rs. 2,34,408 under Rule 173Q of the CE Rules, 1944. Aggrieved by the said order, the party moved the Commissioner (Appeals) who by the impugned order rejected the appeal and hence this appeal. In the grounds of appeal, the appellants have taken the following grounds:

(3.) SHRI M. Venkataraman, learned Counsel appearing for the appellants reiterated the grounds of appeal. He has also invited our attention to the following judgments: