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2019 (6) TMI 508 - AT - Central ExciseClandestine removal - spring leaves - shortage of finished goods - process loss - HELD THAT:- Certain amount of process loss is inevitable on account of various reasons such as loss in the process of cutting, sheering, pouring etc. as well as burning loss. Such losses can vary from unit to unit depending upon the process of manufacture and skill of the manpower and also the quality of input used. The Adjudicating Authority had reservations in accepting the certificate of Chartered Engineer who has examined the appellant’s factory and opined that the loss can be upto 20%. But he has chosen not to cross examine him during the adjudication proceedings. The entire case has been built on the basis of the mathematical projection of the actual quantum of goods which could have been manufactured by the appellant by using inputs in the form of Plates. The total quantity of inputs procured and issued for manufacture has been ascertained from the appellant’s record but the total quantity of goods which could have been manufactured out of such goods is nothing but mathematical projection. Clandestine clearance is required to be substantiated by means of tangible evidence placed on record by Revenue on the basis of investigation. In the present case, we note that other than mathematical projection, no further investigation has been recorded by the Revenue in the form of investigation at the end of the buyers of the allegedly clandestinely cleared goods. As such, we are not inclined to uphold the said demands raised only on the basis of projection. In the case of Ambey Laboratories Vs. Commr. of Central Excise, Delhi-I [ 2017 (6) TMI 374 - CESTAT NEW DELHI] ], one of the issues considered by the Tribunal was allegation of clandestine clearance made on the basis of production estimated based on input output ratio. The Tribunal set aside such demand where no corroborative evidence has been produced by the Revenue supporting the clandestine clearance of goods. The demand for duty arise on the allegation of clandestine removal cannot be sustained - appeal allowed - decided in favor of appellant.
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