MASTAN TIN LTD. Vs. COMMISSIONER OF CENTRAL EXCISE,

JUDGEMENT

(1.) On hearing both the sides on the application, the appeal was taken up for disposal on granting waiver of Predeposit of Rs. 1,59,714.42 and penalty of Rs. 50,000.00.

(2.) The Appellants were working under an exemption notification pertaining to Small Scale Sector Industries from 1.04.94 to 31.10.99. With effect from 01.01.99 they opted for the Modvat scheme, for persons entering this scheme midway. Transitional credit is available in terms of Rule 57H of the Central Excise Rules 1944. In terms of the rule the assesses files declaration, takes acknowledgement from the concerned officials and then takes the credit of duty paid on inputs lying with him as also the inputs contained in the stock of finished goods. It is presumed and expected that the authority would conduct a check to verify the declaration. This would best be done by examining the physical stock. The claim of the appellants is that they had made a statement that the said stock contained only of Printing Inks, tin works and other minor items. The officials had examined and tallied the stock but did not certify the same record. The assessees could not prove the accurate estimate as to how much was in stock of inputs as on the appropriate date by way of records. Show Cause notice was issued on 08.05.00 alleging denial of the transitional credit. The Deputy Commissioner denied the same and also imposed Penalty as mentioned above. The assesses then filed an appeal. The Commissioners (Appeals) directed the appellant to deposit the entire amount of credit, reversed as also the penalty. The assesses filed application for modification claiming financial hardship. The Commissioner (Appeals) dismissed the appeals in terms of Section 35F relying upon the single member judgment in the case of Dewas Dye Castings Pvt. Ltd. in 2000 (116) ELT 663. Hence the present appeal.

(3.) The appellants being under the small scale sector were exempted from maintaining certain statutory records such as Raw materials register. The easiest way for the jurisdictional authority was to ascertain the physical stock as on the date of the filing of the declaration but which was not done. The second alterative was to examine the quantum of the Raw Materials purchased and utilised in the manufacture, after taking into account the stock, an accurate estimation could be made of the stock of inputs as on the material date, and also of inputs contained in the stock of finished article. As per the records it appears that the task of reconciliation was rendered harder by the assessee not having some document and the excise demanding the very same documents which were not maintained. Shri Parekha at the time of personal hearing said that an accurate estimation can be made with the available documents and requested for remand.