BHEL Vs. CCE

JUDGEMENT

(1.) THE appellants are a Public Sector Undertaking. They are aggrieved by denial of Modvat credit to the extent of Rs. 69,15,108/ - on inputs found short for the period 1995 - 96 to 1998 - 99 as also by a demand of duty of Rs. 42,119/ - on 'coal ash' cleared during the period from 23.7.1996 to 31.3.1998. They are also challenging a penalty [equal to the sum of the above amounts] imposed on them under Rule 173Q of the Central Excise Rules, 1944 read with Section 11AC of the Central Excise Act.

(2.) AFTER examining the records and hearing both sides, we note that the appellants had resisted the proposal to deny the above credit to them, by pleading that there were also excesses of inputs in their factory during the material period. It appears, the adjudicating authority had given opportunity to the party to reconcile the shortages with the excesses. The assessee furnished statements showing shortages and excesses of inputs. In each statement, every input had a material code number. The Commissioner found that the code numbers of inputs in respect of which excesses were claimed were different from those of inputs in which shortages were found. Therefore, learned Commissioner declined to set off the excesses against the shortages. In the result, Modvat credit was disallowed on the entire quantity of inputs found short for the period of dispute. As regards coal ash, the assessee resisted the demand by submitting that the item was not excisable. This plea, however, was not accepted. Accordingly, learned Commissioner demanded duty on coal ash cleared without payment of duty during the material period.

(3.) IN respect of the demand on coal ash, it is submitted that a similar product was held to be not excisable in the case of Union of India v. Ahmedabad Electricity Co. Ltd. .