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2015 (12) TMI 590 - AT - Central ExciseSSI Exemption - Clandestine manufacture and removal of goods - Estimation of production - electricity consumption - Availment of exemption under Notification No. 1/93 dated 28.02.1993, for the period 16.10.1993 to Feb, 1995 - Confiscation of seized goods - Held that:- As seen from the Tribunal order, we find this Tribunal while remanding the case gave clear direction to the adjudicating authority to establish with evidences that for manufacture of acid slurry two important raw materials are required ie., sulphuric acid (oleum) and LAB, and the procurement of sulphuric acid from other units, and also clear evidences on removal of Acid slurry ie., final product which is very essential to establish for clandestine removal. Further the adjudicating authority was also directed to examine and to give clear findings on the electricity consumption for the alleged manufacture of finished goods and also to consider the cum-tax benefit. Whereas on perusal of the denovo order, we find that the adjudicating authority has discussed and reiterated only the statements of persons with regard to supply of LAB through SWC and failed to address the issue on the procurement of sulphuric acid/oleum, which is another raw material required for manufacture of acid slurry and electricity consumption. On perusal of various statements and records, it is seen that these are mainly recovered from SWC who manipulated and used various fictitious names for sale of LAB received from TNPL to various customers including the appellants. Adjudicating authority has computed the quantity and value purely on mathematical formula and worked out the total quantity of acid slurry by adopting the ratio of raw materials LAB and sulphuric acid purely based on the alleged quantity of LAB received by the appellants from SWC and not supported with any evidence. As regards the payments made to three employees of SWC, the appellants claimed that this was paid for the expenses. Regarding payment of ₹ 11 lakhs made by Fintex Chemicals to TNPL, we find that there is no finding to link the said payments to supply of LAB to the appellants and mere statements that they are related and controlled by the appellants, is not an evidence to hold that appellants revived LAB. In spite of clear directions by the Tribunal by giving an opportunity to the adjudicating authority to bring out all the evidences including the electricity consumption, adjudicating authority failed to bring out any material evidence in support of supply of LAB by SWC to the appellants, no evidence for such a huge amount of manufacturing activity, or no evidence of any payments for sale of finished goods clandestinely removed and no evidence on removal of spent acid. We also find that no attempt has been made to obtain the documents and records from TNPL, which is crucial for sale of LAB instead the LA had only relied on the statements and records of SWC who is a sole selling agent of TNPL. Entire demand of clandestine removal of acid slurry has been made based on assumption and theoretical calculations by arriving taking notional quantity of LAB. Accordingly, we hold that the demand is not sustainable and entire demand is liable to be set aside. The confiscation of the seized goods of 449 kgs of Acid slurry and imposition of fine ordered by the adjudicating authority is upheld. The excise duty demanded in the impugned order is set aside - However, Penalty on second assessee is reduced - Decided partly in favour of assessee.
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