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M/s Jagannath Steel Pvt Ltd Versus C.C.E. Allahabad

Duty demand - Clandestine removal of goods - Imposition of equivalent penalty - Held that:- The allegation in the show cause notice is that the said sponge iron has been used by the appellant for manufacturing final product. Admittedly, to manufacture final product i.e. MS Ingots the sponge iron as well as iron scrap is required. But as per the evidence on record there is no shortage of iron scrap. Therefore, the allegation of manufacturing MS Ingots of the sponge iron used for manufacturing the .....

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e clearance but that is not the case here. Further, I find that in the case of Nissan Thermoware (P) Ltd. (2010 (12) TMI 487 - GUJARAT HIGH COURT) relied upon by the appellant the shortage of input which has been admitted by the director cannot be ground to demand duty for holding that same has been used in manufacturing of goods removed clandestinely. Therefore, I hold that the revenue failed to prove that the sponge iron found short was used in manufacturing of final product. Therefore, demand .....

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ely. Penalty and equivalent duty is also imposed. 2. The facts of the case are that the appellant is a manufacturer of MS Ingots from sponge iron and iron scrap. A search was conducted in the factory of the appellant on 28.08.2001 and finished goods were verified. It was found that as per statutory records the stock was entered as 300.91 MT and on physical verification it was found 296.050 MT. Therefore, there was a shortage of 4.86 MT of finished goods. Another investigation was conducted in th .....

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. A panchnama was drawn for stock taking done on 30.08.2001 but no panchnama was drawn for stock taking on 28.08.2001 and 13.09.2001 to 15.09.2001. Statement of authorized signatory and Managing Director of the appellant was recorded, They could not explain satisfactorily the reason for shortage of inputs / finished goods. Therefore, a show cause notice was issued to the appellant to allege that inputs i.e. sponge iron and iron scrap found short were used by the appellant in manufacturing of MS .....

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ued to demand duty on clandestine removal of finished goods along with interest and equivalent amount of penalty. The order was challenged before this Tribunal by the appellant and the adjudication order was set aside. Matter was remanded back to the adjudicating authority to pass an appropriate order in accordance with law after providing relied upon documents to the appellant. Thereafter, the relied upon documents were supplied to the appellant and impugned order has been passed. Aggrieved fro .....

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shortage of iron scrap is not justified. It is further submitted that to manufacture MS Ingots the appellant requires sponge iron as well as iron scrap as inputs. Therefore, by any means it cannot be alleged that appellant has used inputs for manufacturing of final product i.e. MS Ingots in the absence of any evidence on record on shortage of iron scrap. Therefore, allegation of Revenue that the short found inputs have been used by the appellant for manufacturing activity is not sustainable, Co .....

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n these circumstances, duty has been rightly demanded from the appellant. He further submits that as there was a shortage of goods therefore duty is rightly demandable as per the decision of this Tribunal in the case of Gulabchand Silk Mills Pvt. Ltd. Vs. CCE Hyderabad-2005 (184) ELT 263 (Tri-Bang), in the case of M/s. Bajrang Petro Chemicals (P) Ltd. Vs. CCE Kanpur - 2014-TIOL-2254-HC-ALL-CX, CCE & ST Daman Vs. Nissan Thermoware-2011 (266) ELT 45 (Guj) . 5. Heard the parties. Considered the .....

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s shortage, Revenue could have produced the panchnama as well as weighment slip as they have done for the shortage deducted on 30.08.2001. Therefore, allegation of shortage of finished goods on 28.08.2001 and weighment done during the period of 13.09.2001 to 15.09.2001 is not sustainable in the absence of any reliable evidence. Further, the Revenue could have made a case against the appellant for shortage of sponge iron deducted on 30.08.2001 that either they have not received the sponge iron or .....

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