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2023 (4) TMI 600 - AT - Central Excise
Clandestine Removal - raw material namely sponge iron was found short in quantity of 403.51 metric ton and finish goods M.S. Ingot was found short of 1952.62 metric tons - no explanation was given by appellants - demand based on the records found during investigation and no statement is relied to demand duty - HELD THAT:- In appellants own case, in the case of Unit 1 M/S SOURABH ROLLING MILL PVT LTD. AND SHRI PANKAJ AGARWAL VERSUS PRINCIPAL COMMISSIONER, CENTRAL TAX, CENTRAL EXCISE & CUSTOMS, CENTRAL GOODS AND SERVICE TAX, RAIPUR (C.G) [2019 (12) TMI 620 - CESTAT NEW DELHI], this Tribunal held that the charge of clandestine removal cannot be based on series of assumption and presumption, where it should be based on evidence like unaccounted purchase of raw material receipt and consumption of raw material etc. - the demand on the basis of yield production of raw material of sponge iron 403.51 metric ton found short is not acceptable, but at the same time, as no explanation was given by the appellant for shortage of raw material, it is held that (if any) Cenvat credit taken by the appellant on sponge iron is required to be reversed alongwith interest.
Shortage of M.S. Ingot - HELD THAT:- No explanation was given by the appellant during the course of investigation and defence taken by the learned Counsel for the appellant that no search warrant was issued to the appellant, we hold that the Investigating Agency found during the course of investigation of another unit, some illegal activity like clandestine removal of goods found, in that circumstances, in continuation of search, the search of the Unit can be done. Therefore, the said argument is not acceptable - if investigation could not have been done, the clandestine removal of goods could not be detected and investigation was continuing process and after completion of investigation, the show cause notice has been issued to the appellant. Therefore, it cannot be held that show cause notice issued to the appellant is barred by limitation.
This case is based on the records found during investigation and no statement is relied to demand duty. Thereafter, the appellant is liable to pay duty on shortage of finish goods - the appellant is required to reverse Cenvat credit on shortage of sponge iron (if any) and liable to pay duty on M.S. Ingots found short.
The duty is payable alongwith interest and penalty imposed on the appellant shall be equivalent to duty payable. Penalty on Shri Pankaj Agrawal is reduced to Rs. 5,00,000/- - Appeal disposed off.