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2017 (5) TMI 601 - AT - Central ExciseShortage of finished goods and raw material - manufacture of MS Ingots and Hot Re rolled product falling under chapter 72 of the Central Excise Tariff Act - the major demand of ₹ 6,46,31,888/- has been made against Appellant on the basis of power consumption in the Appellant unit - principles of natural justice - Held that: - the demands confirmed on the basis of electric consumption cannot be confirmed without considering the submission of the Appellants. The revenue has not considered the electric consumption for setting up of the Unit and rolling mill as well as electricity consumed in ancilliary uses. However no such exercise was undertaken which itself discard the claim of the revenue. The demand of clandestine removal of goods cannot be raised on the basis of power consumption in absence of any positive evidence of clandestine production and removal - the reasons for high consumption of electricity in the case of the appellants factory have not at all been studied and analysed by the Revenue independently. The clandestine manufacture and removal of excisable goods has to be proved viz. by excess receipt of raw material by the Appellant and non-accountal thereof in the statutory records, manufacture of finished goods, labour employed and payment made to them, packing material used and various factors - in the instant case not a single of such evidences was found. Even the department has not taken any step to investigate any such incidence for the very simple reason that nothing of that nature of evidence available - thus, there is no reason to hold that the demand based upon the electricity consumption is sustainable and hence is set aside. As regard other demands, all other demands are also set aside in the absence of corroborative evidence and lack of investigations on some issue. The Adjudicating authority has also disallowed the credit of ₹ 36720/- on cement and the Appellant has not pressed on contesting the said demand. We therefore hold that the demand of ₹ 36720/- is sustainable. The demands made against the Appellant Unit M/s Meenakshi Re-rollers Pvt. Ltd., except cenvat demand of ₹ 36,720/-, are not sustainable - Consequentially penalties imposed against them are also set aside - Since we have set aside the above duty demands and penalties against the Appellant company, the penalty imposed upon the Director, Shri Nikhil Bansal does not sustain, hence the said penalty is also set aside. Appeal allowed - decided in favor of assessee.
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