KHANDELWAL CEMENTS LIMITED Vs. CEGAT AND CCE

JUDGEMENT

(1.) Heard Sri Bharatji Agarwal alongwith Sri Piyush Agarwal, learned Counsel for the petitioner and Sri A.K. Singh, Standing Counsel for the respondent. By the consent of the learned Counsel for the parties, the present writ petition is being finally decided under the second proviso of Rule 2 Chapter XXII of the High Court Rules.

(2.) The brief facts necessary for adjudication of the present writ petition are that petitioner is a public limited company incorporated under the Indian Companies Act, and engaged in the manufacturing of cement falling under Chapter 2509.29 of the Central Excise Tariffs Act and is duly registered under the Central Excise Act. For the manufacture of Cement following raw materials are used; (i) Clinker (ii) Gypsum (iii) Slag. In respect of clinker, excise duty charged from the petitioner manufactured for that petitioner has maintained the raw material account in PG-23/A Part-I in respect of clinker and Gypsum and the entire raw materials purchased by the petitioner were duly recorded in respect of the record of slag. The record of slag has been maintained in the regular books of account which has been informed by letter dated 14 2.1997 of petitioner to the Central Excise authority. In the manufacture of cement, slag was also used by the petitioner hence while making declaration as required under Rule 173 of the rules the petitioner has specifically declared the product manufactured by the petitioner as slag cement. (Annexure-2) and the petitioner's factory was also visualised and checked on 21.8.1998 and the statement of one Murari Lai Sharma was recorded on 29.1.1999.

(3.) A show cause notice was issued and the Commissioner Central Excise passed an order on 21.8 2001 while observing as below: Non-recording of such inputs which constitute 20% to 30% in the final product, non-maintenance of RG-23A for 3 days, shortage in the stocks in factory are sufficient factors to prove that production was being suppressed by the party. Besides, it has clearly been admitted that on records, only OPC has been manufactured and cleared. There is a feeble attempt to prove that they were using slag in their unit by submitting the copies of declaration submitted by them under Rule 57G. On a careful look of the 'Declaration', it may be seen that slag has not been declared as an input by them. Also, in column No. 1 under heading' Final Product' they have only given a broad description taken straight from the Tariff which is not sufficient to prove that slag cement was declared by them to the department as one of the finished goods. This fact was all along concealed from the department. The product under heading 'others' in the declaration has been given as 'N.P. Cement'. I fail to understand as to how 'N.P. Cement' could be construed as slag cement as contended by the notices. I am, therefore, convinced that slag cement was manufactured by them out of the inputs procured without proper accounting and cleared without payment of duty. The demand therefore, appears to have been correctly issued. XX XX XX No manufacturer will ever leave traces of clandestine removal for verification by department and to prove their case through them. There are sufficient corroborative evidence to establish the department's case, of suppression of production, by the party. Apex Court in the case of M/s. D. Bhoormal v. Collector AIR1974 SC 859 , 1975 CriLJ545 , 2003 (90 )ECC347 (SC ), 1985 (5 )ECR2284 (NULL ), 1983 (13 )ELT1546 (SC ), (1974 )2 SCC544 , [1974 ]3 SCR833 has held that it is not for the department to prove the case with mathematical precision. The other corroborative evidences on record leaves me in no doubt that the allegations contained in the SCN have been proved.