ALAGAPPA CEMENTS PVT. LTD. Vs. CEGAT

JUDGEMENT

(1.) The appellant seeks to challenge the order of the first respondent dated 13.9.2002 in Final Order No.1028 of 2002, in and by which the first respondent confirmed the demand of excise duty of Rs.23,04,994/-. The appellant is a cement factory. It was engaged in the manufacture of Portland cement classified under Chapter sub-heading 2502.29 of the Central Excise Tariff Act. It also possessed a valid central excise registration certificate. Being a SSI unit, the appellant availed the exemption benefits in Notification No.175 of 1986 dated 1.3.86 as amended, by which the appellant was availing the concessional rate of excise duty for the units which used clinkers. There was an inspection of the appellant's unit by the Central Excise Headquarters Preventive Officers on 20.7.93. Based on the said verification, the officers concluded that the physical stock of clinkers available was only 123.500 metric tons, as against the book stock of 1214.579 metric tons. At the time of inspection, the officers also obtained statements from the staff who were present at the unit on 20.7.93. Subsequently on 23.7.93, the Vice-Chairman of the appellant informed the Superintendent of Central Excise Headquarters Preventive, Trichy that the stock was not properly taken and wanted the Superintendent to visit the factory for verification of the actual stock of clinkers. However, the said request of the appellant was not acceded to.

(2.) A show cause notice was issued to the appellant on 9.11.94 proposing the demand of duty of Rs.24,27,802/- as well as penalty and interest alleging that the appellant was not entitled for the benefit of Notification No.24 of 1991 for its wrong availment, that the shortage of clinkers must have resulted in the production of cement clandestinely removed without payment of duty, that suppression of receipt of limestone and used in the manufacture of cement resulted in clandestine removal apart from clandestine manufacture of hollow blocks and its removal without payment of duty. The appellant submitted its reply. Thereafter, the Order in Original No.15 of 1996 was passed on 31.10.96 demanding a sum of Rs.23,04,994/- as duty apart from imposition of penalty of equal amount. The appellant preferred an appeal before the first respondent and as a condition for grant of stay, a sum of Rs.10,00,000/- was deposited. The first respondent partly allowed the appeal holding that the appellant was entitled for the benefit of the Notification No.24 of 1991 and the hollow blocks manufactured were not dutiable and were exempted. The first respondent also deleted the penalty imposed under Section 11-AC of the Central Excise Tariff Act. The duty leviable was therefore restricted to Rs.13,04,994/-. Aggrieved against the said order of the first respondent dated 13.9.2002, the appellant has come forward with this civil miscellaneous appeal.

(3.) We have heard Mr.K.Jayachandran, learned counsel for the appellant and Mr.S.Udayakumar, learned senior panel counsel for the respondents.