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2015 (11) TMI 1472 - AT - Central ExciseDuty demand - Estimation of production of production of goods used as Captive consumption - Non accounting of goods - assumptions and presumptions - Invocation of extended period of limitation - Held that:- Duty demand is based on that - (a) chromium content of SS billets/flats manufactured during the period of dispute, (b) chromium content of Ferro chrome used for manufacture of stainless steel billets, and (c) recovery percentage chromium content from Ferro chrome. It is seen that show cause notice dated 21.3.2000 demanding duty for the period 1.4.97 to December, 1999 had also been issued on the same basis, though chromium content of SS billets and percentage recovery of chromium from ferro chrome were different. In view of this, we hold that Prima facie the judgement of apex court in the case of Nizam Sugar Factory (supra) would be applicable to the facts of the present case and therefore, the extended period would not be applicable and hence, the duty demand would be sustainable confined only to normal limitation period. Prima facie view is that the duty demand is based on estimated production of SS billets/flats which has been determined on the basis of a series of assumptions. There does not appear to be any cogent basis for these assumptions. The apex court in the case of Oudh Sugar Mills Ltd. vs .Union of India- [1962 (3) TMI 75 - SUPREME COURT OF INDIA] has held that allegation of under reporting of production of clandestine removal of sugar on the basis of average percentage sugar recovery from sugar cane is not sustainable without tangible evidence of clandestine removal. In our view, the ratio of this judgement is squarely applicable to the facts of the present case. In this regard, we also find that no chemical test has been conducted to ascertain chromium content of SS billets or chromium content of Ferro chrome. There is also no basis for taking the recovery percentage of chromium from ferro chrome as 91.33% while in the earlier show cause notice dt.21/3/2000 recovery percentage of chromium from ferro chrome had been taken as 75%. Prima facie, the duty demand based on such arbitrary assumptions would not be sustainable. - Stay granted.
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