ORDER
S.L. Peeran, Member (J)
1. This is a Revenue appeal against the portion of the Order-in-Original No. 4/92 dated 25.5.1992 by which the Commissioner has granted a small relief to the party in respect of waste and scrap holding the same is eligible for exemption under Notification No. 171/88 dated 13.5.1988 as amended and as a consequence, dropped the demands of Rs. 2,01,989/-. However, by the same order he confirmed duty demand of Rs. 12,43,069/- raised in respect of clandestine removal of CTD Bars/M.S. Rounds cleared from the factory during the period from April 1989 to Nov. 1990 under Rule 9(2) of CE Rules read with proviso to Sub-section (1) of Section 11A of CE Rules, 1944. The Penalty was Rs. 2.5 lakhs on the company and Rs. 50,000/- on Sanjay Tulsyan, Director and further penalty of Rs. 50,000/- on J.B. Gupta, General Manager imposed under various rules of CE Rules, 1944. But that portion of the order which was against the appellants was appealed by them by separate appeal No. E/604, 1404, 1407/92 which came up for consideration before this bench and the appeals were dismissed on merits by Final Order No. 933 to 935/98 dated 19.5.1998. However, the penalty was reduced to Rs. 1.5 lakhs on the company and on the individuals it was reduced to Rs. 25,000/- by separate ROM order dated 5.1.2000. In the final order of the Tribunal, the various contentions raised by the appellants that the inputs received by them were duty paid was not accepted by the Tribunal and it was held that the department had clearly brought out on record the evidence that the inputs received by the appellants were not duty paid and on that finding, held that the benefit of exemption Notification No. 202/88 did not arise and the same was rightly rejected in the Commissioner’s Order-in-Original. Likewise, the claim of Modvat credit was also held to be rightly rejected.
2. In this appeal, the Revenue has taken up the plea that the Commissioner was not justified in dropping the demands and holding ferrous waste and scrap are deemed to be duty paid despite the tact that the appellants had not produced any evidence of its having purchased through Bills/GP-Is. It is stated by the Revenue that Notification No. 202/88 and Notification No. 171/88 (meant for ferrous waste and scrap) stipulates a condition that the raw materials thereof should have suffered duty for the purpose of claim of the benefit of Notification. It is stated that both ferrous waste and scrap and other productions of CTD Bars/MS Rounds have emerged from the same stream of raw materials and the said stream of raw materials had not suffered duty, therefore while confirming duty for CTD Bars/MS Rounds, Commissioner should have confirmed duty even for ferrous waste and scrap and hence the Revenue seeks for allowing their appeal.
3. Ld. D.R. relied on the final order cited above and submits that the issue is fully decided in respect of the same issue and hence seeks for allowing the appeal.
4. Ld. Counsel fairly accepts the position of the impugned order in so far as that portion of the order which was against the assessee which has since been confirmed by the Tribunal in the final order cited above. However, he submits that duty computation in the show cause notice is not correct as the source of computation was the Private register i.e. dairy which was maintained by the appellants which had shown empty scrap to be only 293 M.T. whereas the duty has been computed on 326 M.T. Therefore, he seeks for remand of the matter for duty computation in this case.
5. Ld. D.R. points out that separate Penalty is also required to be fixed with regard to the evasion of duty on this raw material in view of the duty liability which is likely to be confirmed in the matter.
6. At this point, Ld. Counsel submits that against the final order of the Tribunal, they had filed a Writ Petition before the High Court and in the meantime, the Finance Bill pertaining to the KVSS had been passed. And they had already paid the entire duty amount of Rs. 12,43,069/-. However, in terms of the High Court’s direction, the aspect pertaining to Penalty had been settled through this scheme. He submits that while allowing this Revenue appeal, there should be an order on penalty as the matter has been settled and duty has been paid on that portion of the order which the appellants did not succeed before the Tribunal.
7. On a careful consideration of the submission, we notice that the impugned order-in-original had already confirmed duty by holding that CTD Bars/M.S. Rounds had not suffered duty and they were not entitled to the benefit of Notification. The Revenue’s contention that the dropping of demands on ferrous waste and scrap were not justified as the Notification provides for grant of exemption only on condition that the raw material ought to have been suffered duty. The Tribunal had already given a finding that the raw material with regard to ferrous waste and scrap and other products such as CTD Bars/M.S. Rounds have emerged from the same stream of raw material and that raw material had not suffered duty. When this is the position in the terms of the Tribunal’s final order, then the benefit of exemption Notification No. 171/88 for ferrous waste and scrap ought to have not been granted by the Ld. Commissioner in the impugned order by dropping the proceedings. In that view of the matter, we hold that the Revenue’s prayer for confirmation of demand on ferrous waste and scrap is required to be confirmed. However, plea of the counsel that computation has not been correctly done in terms of the figures available from the seized records, the matter requires to be verified by the adjudicating authority. The reason is that we do not have the original records to verify this aspect of the matter as to whether the correct figure is 293 MT or 326 MT. Therefore, the matter is remanded to the adjudicating authority for computing correct duty liability on this aspect of the matter. The appellants shall be given an opportunity of hearing. In so far as the penalty for non-payment of duty on this aspect is concerned, the plea of the appellants that the matter has been settled under KVS Scheme on penalty in so far as confirmed demands are concerned is required to be taken into consideration by the Commissioner in de novo consideration while computing duty on this aspect of the matter. In that view of the matter, the Revenue prayer for confirmation of duty for clearance of ferrous waste and scrap is allowed. However, the aspect pertaining to computation of duty and penalty is referred back to the original authority for de novo consideration. The appeal of the Revenue is allowed in the above terms.
(Pronounced and dictated in open Court).