NUTECH POLYMERS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The issue involved in these four appeals, arising out of a common Order -in -Original No. 6/2003, dated 26 -3 -2003 is whether M/s. Nutech Polymers Ltd., Appellants No. 1, were clearing their final products in the disguise of waste.

(2.) 1 Shri K.K. Anand, learned Advocate, mentioned that M/s. Nutech Polymers Ltd., Appellants No. 1, manufacture PP/HDPE Tape, fabric, sacks; that when the Central Excise officers visited their factory on 19/20 -3 -2001, the stock of finished goods was found to tally with the balance recorded in RG1 Register; that stock of inputs, namely, HDPE Granules and Master batch was found short; that the officers also visited the premises of their job worker, M/s. Mateshwari Enterprises and the total variation in respect of all items came to 493.2 Kgs. from which 2,030 sacks were alleged to have been manufactured and removal involving duty Rs. 4,758/ -; that it was also alleged that Appellant No. 1 had despatched 1,18,546 bags without payment of duty amounting to Rs. 1,44,572/ -; that the Department also alleged on scrutiny of Daily Production Slips for the period from November, 2000 to March 2001 (up to 18 -3 -2001) with RG1 register that the Appellant No. 1 had accounted inflated quantities of wastage (31,154 Kg) of PP/HDPE whereas the actual wastage was 9,466.90 Kgs.

(3.) The learned Advocate, submitted that there is no evidence that the final product was removed without payment of duty in the guise of waste; that the waste which arises in the tape plant and fabric section are entered in the private records; that the production reports only showed the wastage till the stage of production of tape and of fabric stage; that the wastage take place at various stages after production of tape and fabrics such as trimming waste, quality control test, weaving defects, fabric cutting, improper cutting of fabrics, etc., that the waste in this type of industry is approximately 8% up to the stage of manufacture of tape and fabric and 10% up to the stage of manufacture of bags; that the standard Input -Output Norms, as per EXIM Policy with respect to HDPE Woven fabrics is 1.080 Kg of HDPE granules vis -a -vis the quantity that has to be exported as 1 Kg. of HDPE Woven fabrics; that in respect of HDPE Woven sacks the quantity allowed is 1.10 Kg of HDPE granules vis -a -vis the quantity that has to be exported as 1 Kg of HDPE woven sacks; that M/s. Reliance Industries, in their work order of woven sacks specifically provided for 10% as a waste; that the Plastic Manufacturers Association of Rajasthan has also certified in one case that the percentage of wastage in this industry is about 10% to 12%. He, further, submitted that the personnel of the Appellant No. 1 have deposed in their statements that the percentage of waste is very high and the wastage recorded in the statutory record (RG1) represents the actual wastage occurred in the production of fabrics and bags; that their personnel had never admitted that they had cleared the fresh PP/HDPE fabrics without payment of duty in the guise of waste; that waste fabrics had been cleared on payment of duty; that Revenue had not recorded any statement of their buyers whom they allegedly had cleared the fabrics without payment of duty in the guise of waste; that in the absence of any concrete and positive evidence, no presumption could be drawn that there was clandestine removal of the goods; Reliance has been placed on the decision in the case of Oudh Sugar Mills Ltd. v. Union of India, 1978 (2) E.L.T. (J172) (S.C.) and Dunlop India Ltd. v. CCE, 2001 (132) E.L.T. 345 (T). He also referred to the decision of the Tribunal in the case of Shram Shakti Polytex Pvt. Ltd. v. CCE, Jaipur, Final Order Nos. A/548 -550/2002 -NB, dated 17 -5 -2002; [2002 (144) E.L.T. 183 (T)] wherein the demand of duty had been set aside on the ground that there was no clandestine removal of bags by showing waste in excess; that the facts of Shram Shakti Polytex and the said decision is fully applicable. He also relied upon the decision in the case of Rajasthan Petro Synthetics v. CCE, Jaipur, Final Order No. A/231/2003 -NB, dated 2 -5 -2003; [2003 (160) E.L.T. 297 (T)]. Finally the learned Advocate submitted that they have been directed to prove the negative by giving finding that they had not produced any documentary evidence about the generation of waste and reasons for not recording the waste in daily production report; the mere fact that the wastage was not recorded after tape and fabric stage cannot be made the basis for assuming that no waste had arisen after these stages; that in any case duty cannot be demanded for the period 1 -4 -97 to 18 -3 -2001 on the basis of the daily production report for the period November, 2000 to 18 -3 - 2001; that at best the Revenue could rely on these reports for demanding duty for which the daily production reports pertain to; that Revenue cannot demand duty for the period prior to daily production reports.