NARENDRA IMPEX Vs. COMMISSIONER OF CENTRAL EXCISE, DAMAN

JUDGEMENT

(1.) AFTER dispensing with the condition of pre -deposit of duty of Rs. 2,19,133/ - and penalty of identical amount, I proceed to decide the appeal itself inasmuch as the issue lies in a narrow campus.

(2.) THE appellants are engaged in the manufacture of plastic lay flat tubing, plastic films, plastic bags etc. falling under Chapter 39 of the Central Excise Tariff Act, 1985. Based upon 3 CD returns filed before the income Tax authorities, proceedings were initiated against them alleging that they have short received the raw material to the extent of 3262.94 kgs. and as such, have taken, excess credit to that extent. During the adjudication proceedings, the appellant explained that such shortage reflected in the Income Tax return is on account of yield loss occurred during the process of conversion of the raw material into final product and as such, the same is reflected as shortage, in the return. The original adjudicating authority accepted the appellant stand and dropped the demand. However, on appeal field by the Revenue, Commissioner (Appeals) accepted the same and reversed the order of the original adjudicating authority. Hence the present appeal

(3.) AFTER having gone through both the orders, I find that the entire case of the Revenue is based upon shortage in respect of quantity of inputs mentioned in the 3 CD Income Tax Return. The original adjudicating authority has observed that except for the above, there is no other corroborative evidence to establish that the shortage was on account of short -receipt of raw material. The appellants have availed credit of the duty as reflected in the invoices for the inputs. There is no allegation that credit availed by them is in excess of the duty paid by the supplier of the inputs. Further, as observed by the original adjudicating authority there is some process loss during blow moulding process and the loss as claimed by the appellant is not on the higher side. On the other hand, the order of the Commissioner (Appeals) proceeds on assumption and presumption and not on the basis of any evidence showing less receipt of raw material in the appellants factory. The benefit of yield loss is required to be extended to the appellant. As such, I set aside the impugned order and restore the order of the original adjudicating authority. Appeal is accordingly, allowed with consequential relief to the appellants. Stay petition also appeal get disposed of.