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2015 (11) TMI 608 - CESTAT MUMBAI

2015 (11) TMI 608 - CESTAT MUMBAI - TMI - Duty demand - Clandestine clearance of goods - Shortage of goods - Held that:- Department could not produce any evidence regarding clandestine removal of input said to have been found short and respondent subsequently submitted photograph which shows that heap of rejected material lying in the factory which was ignored by the department. When this discrepancy was pointed out, the department could have taken sample from said heap and ascertain what was th .....

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s confirmed that samples contains 46.35% iron. - No infirmity in the order passed by Ld. Commissioner(Appeals) and I am with the fully agreement with his findings therefore impugned order is sustained. - Decided against Revenue. - APPEAL NO. E/84, 85/07 - Dated:- 12-5-2015 - Mr. Ramesh Nair, Member (Judicial) For the Petitioner : Shri. V.K. Shastri, Asstt. Commissioner(A.R.) ORDER Per : Ramesh Nair This appeal is directed against Order-in- Appeal No. SVS/322/0323/NGP-II/2006 dtd. 13/10/2006 pass .....

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Nagpur visited the factory premises of the appellant and conducted physical stock verification. In scrutiny of statutory records, it revealed that in the finished product except slag stock of all other products viz. M.S. Non Alloys steel Ingots, Other alloy steel ingots, Ferrous waste and scrap etc. was found Nil . The officers conducted checks of raw material in the presence of two independent panchas and Shri. Prafulla Vaidya, Managing Director of M/s. Shripra Alloys Ltd. One Panchanama was .....

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ison of physical stock with the booked stock, it was found that stock of 3433.540 MT was found short as compared to booked stock, accordingly show cause notice was issued, which was culminated into adjudication order No. 152/SS/ADC/2006-07 dated 19/4/2006 wherein Central Excise duty of ₹ 38,49,432/- with ₹ 16,056/- were confirmed on the shortage of inputs, interest under Section 11AB and penalty of ₹ 1 lakh under Rule, 173Q of erstwhile Central Excise Rules, 1944 read with Sect .....

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ts that at the time of visit of the Central Excise officers in the presence of independent panchas and also in the presence of Managing Director of the company stock verification was done and there was shortage of inputs was found. Department has confirmed the demand not only on the basis of panchanama but there was further chemical test got conducted from chemical examiner therefore department carried out the process of physical stock verification, chemical test thereafter came to the conclusio .....

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however they filed written submission dated 27/8/2014. As per the written submission appellant submits that demand was wrongly confirmed as the quantification of the physical stock lying in the factory has not been correctly done by the officer; the physical stock of sponge iron was not considered on the basis of chemical examination report only on the ground that the chemical examiner report shows that the iron contain in stock is 60-63 % and chemical examiner as concluded that because of this .....

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e shortage. It is his submission that the consumption of input were being made by applying backward calculation vis-a-vis the quantity of marketable final product because in each heap there used to be production of inferior quality of final products and all such stocks used to be re-melted in the next heat. The Ld. Commissioner(Appeals) after appreciating the entire evidence on record and explanation put forth by the appellant disagree with the conclusion of Chemical examiner in the chemical ana .....

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all the plausible explanation during the adjudication process to the adjudicating authority but all the explanation brushed aside only on the ground that every is after thought whereas their explanation and the survey report of chartered engineer could have been re-examined as the stock of the inputs were lying in the factory and it was always available for re-check or re-examination of the material. The respondent further submits that department has lead any evidences whatsoever to prove that .....

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on of stock physical weighment of the goods was not conducted. The stock was verified high -basis and on the basis of input output ratio which worked out on the basis of chemical examiner report. It is observed that the stock of input i.e. Sponge Iron etc. was lying in the factory in the form of head and some of the heaps were not taken into account. For the reason that either same was not considered as sponge iron or as per the chemical examination report it containes 61.3 and 62.8 % of iron co .....

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wo years therefore it has exposure to the nature absolutely undergone some changes. Chemical examiner report in the one hand it says iron contains 62.8 % but in other hand it says material does not have characteristics of sponge iron. The department has not produced any evidence to establish that material lying in stock identified by respondent as sponge iron is something other than sponge iron. Department could not produce any evidence regarding clandestine removal of input said to have been fo .....

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ix with slag etc is lying with the factory. This vital fact was ignored by the adjudicating authority that has all the opportunity to check this fact as the material was lying as it is in the factory. The respondent got rejected material tested at chemical laboratories which has confirmed that samples contains 46.35% iron. Respondents contention though out before the adjudicating authority was that they were accounted consumption of input on the basis of production shown in the RJ1 register whi .....

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