TMI Blog2004 (7) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 of the Central Excise Schedule. The appellant also manufactured bottles for packing water. Under a show cause notice dated 28-10-2002 an allegation was raised that the appellant evaded duty of about Rs. 5.7 Crores during the period November, 1997 to February, 2002 by 1) clandestinely manufacturing and by 2) under sales of packing materials to appellant s franchisees and a sister unit. Bulk of the duty demand was in respect of water allegedly clandestinely manufactured and removed. The charge was based on the allegation that the appellant was showing excessive wastage of plastic inputs used in the manufacturing of bottles for packing water, while, in fact it, was actually producing a much higher quantity of bottles and using them for bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion are contrarily to facts on record. He has pointed out that actual wastage of inputs were being reported to the jurisdictional Central Excise Authorities contemporaneously and those reports had gone uncontroverted. It is the submission of the learned Counsel that having failed to carry out any verifications and obtain evidence that the wastage declared was false at the relevant time, it was impermissible and irresponsible on the part of the Revenue to make an allegation of clandestine production quite belatedly. It was also pointed out that the assumption of a normal wastage of 0.5% by the Revenue fails to take into account the wastages which takes place at various stages on account of different factors mentioned by the appellant in thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of quantity of water produced and cleared has also been made without any consideration of capacities from time to time. It is being pointed out that the demand has been computed assuming a fixed capacity of 7000 Ltrs., per hour of water bottling, while the appellant s capacity of production till May, 2000 was only 2500 Ltrs., Per hour. The capacity was enhanced to 7500 Ltr. per hour only from June, 2000. 5. With regard to the valuation of packing materials sold to franchisees and appellant s own sister concern, the appellant had contended that there was no under valuation inasmuch as these items were being sold to unconnected buyers also at the same prices. Learned Counsel for the appellant emphasized that in a case of sale of same i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances give credibility to the appellant s submission that their records faithfully represented production and clearance and that the allegation of clandestine production and removal have been made purely on surmise, assumptions and presumptions. It is well settled that a duty demand cannot be maintained on assumptions and presumptions Oudh Sugar Mills Ltd., (supra). Even these assumptions lose their credibility in view of the appellant s submission that allegations have been made without taking into account appellant s capacity of production at various times. The specific case of clearance of preform to M/s. Superior Pet P. Ltd. remains explained by contemporaneous records. In these circumstances, we are of the opinion th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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