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2019 (5) TMI 1565 - CESTAT ALLAHABADBenefit of N/N. 7/94-CE dated 01.03.1094 - duty free procurement of sulphuric acid - diversion in open market and instead they purchased spent sulphuric acid which is being used by them in the manufacture of SSP - HELD THAT:- The entire case of the Revenue is based upon the statement of the Director admitting that the sulphuric acid procured by them without payment of duty in terms of N/N. 7/94-CE dated 01.03.1994 was cleared by them in the open market and instead they purchased spent sulphuric acide which was used by them in the manufacture of SSP. The said statement dated 10.04.1996 was subsequently retracted by him vide letter dated 14.04.1996 which was received by the Department on 17.04.1996 - Apart from above, there is no evidence on record indicating the sale of the sulphuric acid and the purchase of the spent sulphuric acid. It is well settled law that the retracted statements cannot be made the basis for holding against the assessee unless the same are corroborated in material particulars by independent and reliable evidences. In the absence of any evidence to the contrary, I find not merits in the Revenue’s stand. As per the appellant such consignment of duty free procurement were verified by their Jurisdictional Central Excise officers and no discrepancies were ever found. The Commissioner (Appeals) observed that the said plea of the assessee does not hold water and is not sustainable inasmuch as the Jurisdictional Central Excise Officer have verified the quantity of the raw material and not the quality of the goods. However, the same reasoning of Commissioner (Appeals) acts prejudice to the Revenue’s own case. The supplier in the present case was the manufacturer of sulphuric acid and not spent sulphuric acid. As such on this ground also the Revenue’s case has no legs to stand. The Lower Authorities have not referred to any technical literature to show that the SSP can be manufactured even out of spent sulphuric acid. If the raw material specified in the Notification is sulphuric acid and not spent sulphuric acid, the said fact leads to an inevitable conclusion that it is only sulphuric acid which can be used for the manufacture of SSP. Revenue has not advanced any evidence to show that the SSP can be manufactured even out of the spent sulphuric acid. Appeal allowed - decided in favor of appellant.
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