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2018 (11) TMI 1278 - CESTAT KOLKATAClandestine removal - Pig Iron - it was alleged that the appellant has recorded lower quantity of finished goods in the Daily Stock Account (DSA) and has clandestinely removed the final products i.e. Pig Iron without payment of duty - allegations mainly based on private records - Held that:- The entire case is based on the alleged SMS exchanged between the executives of the company. During the visit to the factory on 07.08.2008, the mobile phones of some of the executives were seized and taken away. After several months, the department on their own efforts produced listing of the purported SMS and its contents showing certain figures, which the SCN described as clandestine production and removal - That apart, the fact that the contents of the SMS were discretely ascertained is evident from the comments of Mr. Dipak Pradhan, employee handling IT issues of the assessee company in saying only “print outs taken before me”. Thus, it appears that the entire SMS listing is unverified and does not bear any authentication or signature of any authority competent to do so and is not specifically admitted by any of the executives of the company. No discrepancy has been found in the stock of finished goods or in procurement in the factory and the entire production has been recorded against serially numbered casting slips, with supporting weighment slips. It is a well settled principle that to establish clandestine removal, tangible, strict, positive, concrete, direct, circumstantial and corroborative evidences are required which must form a complete chain to rule out any preponderance of probabilities and lead to inescapable conclusion - While in the instant case allegations have been made solely on the basis of tentative private records and data and no discrepancy has been noticed in the procurement of raw materials/power or stock of raw materials/finished goods. The allegation has been raised on the basis of hypothetical and illogical input-output ratio of iron ore to pig iron at 1.233 MT, which if compared with the average ratio of comparable manufacturing units, is much lower. Ratio of 1.233 MT is practically impossible to achieve not only for NML but also for any other company in the same industry - It is an admitted position that the company had consumed during the impugned period 90722.88 MT of iron ore (on net basis). This itself leads to an impossibility that the total production of hot metal is more than iron ore consumed. This clearly indicated that the contention of the revenue is not sustainable. Demand not sustainable - appeal allowed - decided in favor of appellant.
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