Per P.S. Bajaj :

The above captioned appeals have been preferred against the common order-in-original dated 19.7.2001 passed by the Commissioner of Central Excise vide which he had confirmed the duty demand of Rs. 20.25,533/- with equal amount of penalty under Section 11-AC and of Rs. 5 lakhs under Rule 173Q on appellants No. 1 and also imposed penalty of Rs.50,000/- on appellant No. 2.

2. The appellants No. 1 (hereinafter referred to as 'Company') is engaged in the manufacture of EPS Mouldings and corrugated boxes/containers falling under Chapter 39 and 48 respectively of the CETA which were exempt from duty during the disputed period. The appellant No. 2 was working as factory manager at that time. The duty demand has been raised against them on three counts-

(i) an amount of Rs. 13,19,175/- has been demanded on account of manufacture of liquid gum by them in their factory and consumption of the same captively in the manufacture of corrugated boxes which were fully exempt from payment of duty;

(ii) duty of Rs. 2,23,277/- has been demanded on the paper cutting waste generated in the process of manufacture of corrugated boxes and cleared by the appellants by issuing commercial i