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2015 (10) TMI 1551 - AT - Central ExciseDuty demand - Clandestine removal of goods - Imposition of equivalent penalty - Held that - The allegation in the show cause notice is that the said sponge iron has been used by the appellant for manufacturing final product. Admittedly to manufacture final product i.e. MS Ingots the sponge iron as well as iron scrap is required. But as per the evidence on record there is no shortage of iron scrap. Therefore the allegation of manufacturing MS Ingots of the sponge iron used for manufacturing the same is not sustainable in the absence shortage of iron scrap. In these circumstances the allegation against the appellant is only on the basis of presumptions and assumptions. Duty cannot be demanded on allegations based on assumption and presumption - in the case of Gulabchand Silk Mills Pvt. Ltd. (2005 (3) TMI 192 - CESTAT BANGALORE) there was excess goods found in the factory and same cannot be explained by the assessee. Therefore it was held that the excess stock is meant for clandestine clearance but that is not the case here. Further I find that in the case of Nissan Thermoware (P) Ltd. (2010 (12) TMI 487 - GUJARAT HIGH COURT) relied upon by the appellant the shortage of input which has been admitted by the director cannot be ground to demand duty for holding that same has been used in manufacturing of goods removed clandestinely. Therefore I hold that the revenue failed to prove that the sponge iron found short was used in manufacturing of final product. Therefore demand is not sustainable. - Decided in favour of assessee.
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