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2019 (12) TMI 620 - AT - Central ExciseClandestine removal - excess usage of raw material Sponge Iron, than mentioned - entire demand is based on the closing balances shown in the ER-1 and ER-6 return - The entire SCN is based on inconsistency and the department is taking two stands while calculating the duty on the said finished goods. The department is demanding duty on TMT Bars and Slag only whereas no demand in respect of ‘runners and risers’ and ‘M.S scrap’ was raised in the present SCN. HELD THAT:- The entire demand is based on the yield of production of M.S Ingot which is further used in the manufacturing of TMT Bars. The yield of production was in respect of only a particular month which was uniformly applied for entire demand of Central Excise Duty. At no point or stage, Department has able to prove that the appellant during the relevant period was having electricity connection to manufacture M.S Ingots and TMT Bars. It is an admitted fact that for the period the demand has been raised, the appellant did not have any power connection. Department has also failed to produce that there is any other alternate source of power to manufacture those goods. In such a situation, it is very clear that the entire demand is based on mere average yield of production and no concrete evidence to manufacture the alleged goods has been brought on the record by the department. The statement which has been relied upon by the department is only in respect of month of June 2013 which is uniformly applied for calculating the demand. It is a well settled principle of law that charges of clandestine removal cannot be based on series of assumptions and presumptions whereas should be based on evidences like unaccounted purchase of raw materials, receipt and consumption of raw materials, freight payment for movement of such raw material, dis-proportionate power consumption, capacity utilization and labor employed, unaccounted sales proceeds and substantial cash recovery from office or factory premises, and so on - In the present case, these clinching evidences are absolutely missing and therefore charges of clandestine removal cannot be held sustainable for demand of ₹ 2,86,17,242. Demand of ₹ 48,75,834/- which is based on the invoices issued by the appellant during the period 08.01.2014 to 10.01.2014 for a quantity of 1059.920 - HELD THAT:- The said demand is confirmed by the Ld. Commissioner merely on the ground that some of the vehicle number shown in the invoices are incapable of transporting the alleged goods. The said conclusion was drawn by the Ld. Commissioner only citing the few incidents, wherein number of cases no inquiries were made either from the transporters or from the recipients of the goods. Out of 27 transporters, statements of only 7 transporters were recorded by the officers and only 2 appeared for their cross-examination - In such a scenario, we are inclined to accept the contention of the appellant that in absence of the statements of the recipients of the goods and cross-examination of all the transporters whose statements were recorded, it cannot be concluded that no goods were cleared from the appellant’s premises. In absence of sufficient evidences which are essential to prove the charges of clandestine manufacture and its removal from the factory of the appellant, the demand which are based on the invoices issued by the appellant during the period of 08.01.2014 to 10.01.2014 is also not maintainable and hence liable to be set aside. Appeal allowed - decided in favor of appellant.
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