CCE Vs. R.S. INDUSTRIES (RM) LTD.

JUDGEMENT

(1.) The Revenue filed this appeal against the order of the Commissioner (Appeals), whereby adjudication order was set aside.

(2.) The relevant facts of the case, in brief, are that the respondents are engaged in the manufacture of Hot Re -rolled products and other articles of Iron and Steel classifiable under Chapters 72 and 73 of the Schedule to the Central Excise Tariff Act, 1985. The respondents were paying duty under the Compounded Levy Scheme under Section 3A of the Central Excise Act, 1944 upto 31.3.2000. By Board Circular No. 522/18/2000 dated 31.03.2000, it was directed that Cenvat credit may be allowed in respect of stocks of input -materials, which were lying with the re -rolling mills and induction furnace units as on 1st April, 2000. The respondents filed declarations of the stocks of inputs as on 31.03.2000 and availed Cenvat credit. On 1.4.2000, the Central Excise Officers conducted stock verification. A show cause notice dated 12.02.2001 was issued proposing to demand a Cenvat credit of Rs. 1,80,031/ - availed by them wrongly during the month of April, 2000 in terms of Rule 57AH of the erstwhile Central Excise Rules, 1944 read with Section 11A of the Central Excise Act, 1944 along with interest and to impose penalty. The Original Authority confirmed the demand of Rs. 1,80,031/ - along with interest and appropriated the amount of Rs. 36,657/ - as deposited by them and also imposed penalty of Rs. 50,000/ -. The Commissioner (Appeals) set aside the adjudication order. Hence, the Revenue filed this appeal.

(3.) Ld. Advocate on behalf of the respondent reiterates the findings of the Commissioner (Appeals). He submits that the respondent filed two declarations on 31.03.2000. One declaration was filed in respect of Furnace Oil, Ferro Silicon Manganese and the other declaration was for finished goods and raw materials e.g. Billets, ingots and raw materials for TLT Division. He submits that the Central Excise Officers during their visit on 1.4.2000, verified the stocks in respect of other declarations and no discrepancy was found. It is his submission that the visiting officers did not verify the declaration for Furnace Oil and Ferro Silicon Manganese. It is contended that as revealed from verification report that visiting officers did not verify the stocks with records maintained by them in respect of inputs in question. He further submits that the respondent produced RG -23 A Part -I and Part -II registers along with duty paying documents in order to establish that the goods were lying at their factory, which was not considered by the Original Authority. It is his submission that the Commissioner (Appeals), after examining the records, set aside the demand of duty.