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2008 (8) TMI 471 - CESTAT, BANGALORESuppression of production and clandestine removal – demand of near about Rs. 7 crore based on theoretical calculation of ratio of raw materials to pulp and from pulp to paper – demand arrived at on theoretical basis on basis of weigh bridge register, RT5 – Formula of pulp quantity multiplied by 100.88 to arrive at quantity of paper – basis of adoption of ratio 100.88 not clear – Held that figures of another unit having modern machinery is not correct basis for arriving at clandestine manufacture and removal – Revenue should have conducted experiment to arrive at ratio of raw materials to pulp and also to paper - Unless those figures arrived at by theoretical calculations are backed by concrete evidence, no demand can be made. – As regards exemption for waste paper under Notification No. 47/83, no detailed finding regarding percentage of waste paper consumed in 1984-85 and1985-86 – Collector referring to import of old newspaper and its diversion to various dealers – Commissioner has not given any reason for rejecting calculations submitted by assessee - Held that merely on account of diversion of imported old newspaper, conclusion of less consumption of waste paper cannot be arrived – held that exemption is available – demand is not sustainable – Paper submitted as cleared under Notification No. 163/67 dated 21-6-1967 for text books to Director of Public Instructions – Investigations revealing that submitted amount not received by such Director – allegation that certain clearances with fictitious gate passes and certain clearances for which exact detailed not given – SCN not giving details of either fictitious gate passes/invoices – further, there was no detail as to customers to whom paper cleared – hence demand of nearly 18 lakh, is set aside – Though majority of demand is set aside, wrong availment of exemption for part of the period was upheld – penalty on director (who is involved actively in function of factory), is upheld - (a) We set aside the demand of Rs. 4,58,71,914/- on the alleged clandestine clearance. (b) We set aside the demand of Rs. 18,37,879/- on account of the alleged wrong availment of the Notification No. 163/67-C.E., dated 21-6-1967 for supply of paper for printing of news paper, text books, etc. (c) We remand the matter in respect of the demand of duty for the year 1983-84 for consumption of waste paper less than 50%. (d) We hold that the appellants are entitled for the benefit of Notification No. 47/83-C.E., dated 1-3-1983 therefore. (e) We set aside the demand of differential duty for the years 1984-85 and 1985-86 in respect of the consumption of waste paper less than 50%. (f) We set aside the confiscation of 891.16 MTs of paper. We also set aside the confiscation of land, building, plant and machinery used for the manufacture of paper. As a result, the redemption fines imposed are set aside.
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