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2023 (5) TMI 403 - AT - Central ExciseClandestine removal - denial of benefit of concessional rate afforded to small scale industry (SSI) units by N/N. 8/2003-CE dated 1st March 2003 - shortages ascertained by physical inspection - demands based on energy consumption - Evasion of duty - HELD THAT:- The issue of clandestine clearances allegedly prevalent in the steel sector had been in controversy for long and, as pointed by the Learned Counsel, the Tribunal, in several decisions, has held that the deriving of presumed production with reference to electricity consumption is not sufficient for recovery by recourse to section 11A of Central Excise Act, 1944. From the decision of the Tribunal in RA CASTINGS PVT. LTD. VERSUS COMMISSIONER OF C. EX., MEERUT-I [2008 (6) TMI 197 - CESTAT NEW DELHI] holding that he Central Excise authorities have no jurisdiction to examine or determine whether the share transactions of the assessee-company are genuine or not and whether the income from share trading duly verified, accepted, and assessed to the income-tax authorities could be disregarded by them to treat the same as proceeds of ingots alleged to have been clandestinely produced and sold by the appellants. The entire action of the Revenue in this regard is without jurisdiction. Thus, it is clear that the law does not permit detriment of duty liability, and other consequences, solely on the ground that energy consumption is not reflective of actual production. The lack of legal sanction for determination of clandestine removal merely from unexplained energy consumption is now too well settled to be disturbed. As no evidence, other than the outcome of the test of 2008 and that too for two hours, been employed for determination of production for a five year period commencing in 2004, the conclusion of goods having been clandestinely produced and cleared is clearly unacceptable. As it is by addition of allegedly clandestinely removed production that exemption extended to ‘small scale industry (SSI)’ has been denied, recovery of ₹ 78,99,000/- is also without legal sanction. Determination of duty liability on shortage of stock - HELD THAT:- Reliance placed by Learned Counsel on the decision of the Tribunal in CHANDPUR ENTERPRISES LTD. VERSUS COMMR. OF C. EX. & SERVICE TAX, MEERUT-I [2014 (8) TMI 970 - CESTAT NEW DELHI] and in VEHALANA STEEL & ALLOYS PVT. LTD. VERSUS COMMR. OF C. EX., MEERUT-I [2016 (2) TMI 450 - CESTAT NEW DELHI] holding that estimate of shortages does not suffice for recovery of duties clearly comes to their assistance. It is seen from the records of the present dispute that the alleged shortages are outcome of estimate without proper weighment. Accordingly, demand of ₹23,645/- on shortage of 7.546 metric tons valued at ₹2,29,557 also fails. Appeal allowed.
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