SOUTHERN PRESSURE CASTINGS Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) The appellants are engaged in the manufacture of parts and accessories of machinery and are availing Cenvat credit on inputs and capital goods used in for the manufacture of such products. Officers of Central Excise who visited their factory on 23 -3 -2001 found that the appellants had maintained 'BIN' cards in their stores and had removed Cenvat -availed aluminium ingots (input) to their sister concern viz., M/s. Daya Casters (DC, for short) without payment of duty or observing any other Central Excise formality. The appellants claimed that the Cenvat -availed input had been sent to M/s. DC only for job work purpose. But the investigators found that the appellants had not used Rule 57F(4) challans or any other document for the movement of Cenvat -availed input to M/s. DC and also had not paid any amount as labour charges to M/s. DC. Thus it appeared to the Department that the appellants had diverted Cenvat -availed input clandestinely without payment of duty during 2000 -01. Hence a show cause notice was issued to them. In their reply to the notice, they claimed that they had used all Cenvat -availed inputs in the manufacture of finished products and that they were discharging appropriate duty on all removals from their factory in accordance with the Central Excise Rules. The only basis for the Department's allegation that they had removed credit -availed input to M/s. DC without payment of duty was the record of entries in the BIN cards. They submitted that these BIN cards were maintained only from November, 2000, and that too, for the sole purpose of applying for ISO 9000 certification. The cards were not properly maintained and the entries therein were not authentic. There was no evidence to show that the goods shown in the BIN cards as having been supplied to M/s. DC were actually received by them. The appellants further submitted that a verification of the raw material consumption details and the stock statement for the year 2000 -01 would show that they had utilised all the inputs received by them and had not diverted any input to M/s. DC or to anybody else during the said period. The demand of duty of Rs. 2,33,674/ - raised in the show cause notice (which invoked the extended period of limitation under the proviso to Sub -section (1) of Section 11A of the Central Excise Act) was affirmed against the party by the adjudicating authority. A penalty of equal amount was also imposed on them under Section 11AC of the Act. A separate penalty of Rs. 23,000/ - was also imposed on the party under Rule 25 of the Central Excise Rules, 2001/2002. The appeal preferred by the party against the decision of the original authority did not succeed before the Commissioner (Appeals). Hence the present appeal.

(2.) Heard both sides. Ld. Counsel for the appellants submitted that certain entries in the BIN cards showing certain quantities of aluminium ingots as having been issued to M/s. DC formed the sole basis for the demand of duty against them. The BIN cards, which were created for the old period for the purpose of obtaining ISO certification for the company, were not trustworthy, as they did not reflect correct movement of aluminium ingots. Counsel submitted that no other evidence was adduced by the Department to support the allegation that the appellants had removed credit -availed ingots to M/s. DC without payment of duty. Had there been any such removal of ingots, the same could have been confirmed by the officers who visited the appellants' premises, by detecting shortage of ingots in stock. But no such shortage, was noticed by the officers. The appellants could successfully demonstrate before the authorities, through a statement showing receipt of aluminium ingots and production of components therefrom during the period of dispute, that the inputs and final products were duly accounted. Counsel argued that the charge of clandestine removal of credit -availed inputs was not supported by positive evidence. The burden of proof had not been successfully discharged in this case. In this connection reliance was placed on the Tribunal's decision in T.G.L. Poshak Corporation v. Commissioner of Central Excise, Hyderabad [2002 (140) E.L.T. 187 (Tri. -Chennai)], wherein the Department's allegation, against the assessee, of clandestine removal of goods solely based on certain private accounts was rejected.

(3.) Ld. DR reiterated the findings of the original authority and the first appellate authority. He submitted that the demand of duty was based on the assessees' own records viz. BIN cards. As those records were admittedly maintained by them, it was not open to them to dub it as unauthentic. According to ld DR, they were bound to stand by the authenticity and genuineness of the BIN cards. Ld. DR pointed out that one Shri Krishnamurthy (Accounts Officer of the appellants) had stated that the credit -availed ingots had been sent to M/s. DC for job work. In their statement, M/s. DC denied having received any labour charges from the appellants. In the circumstances, the factum of removal of credit -availed inputs by the appellants to their sister concern viz. M/s. DC was undeniable.