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2024 (3) TMI 276 - AT - Central ExciseClandestine Removal - process loss - yield of 79% on deployment of 228584 kgs of raw materials in 2006-07 for production of 146295 kgs of finished product leaving 48002 kgs unexplained - recovery alongwith penalty - HELD THAT:- The appellant had deployed various raw materials in different proportions for manufacture of finished goods. The lower authorities, without considering the material mix and reaction loss of each separately, have merely presumed that weight of raw materials should be found to match that of finished goods and that, in the event of gap if any, the difference should be explained. There are no provision in Central Excise Act, 1944 that authorises duty recovery in such circumstances. There is no allegation of clandestine removal in the show cause notice let alone any evidence thereon. Even if such gap was ascertained, and explanation not found acceptable, this could, at best, be used to corroborate alleged illicit removal which is not alleged here. Effectively, duty is sought to be collected on what be alleged to be inefficiency which the statute does not envisage. There are no reason to sustain the demand, interest and penalty - the impugned order set aside - appeal allowed.
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