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TMI Blog2007 (5) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... t page 28 of the order of adjudication). Such proceeding was initiated by the DGCEI, Kolkata against the appellant on the allegation that excisable goods i.e. spring leaves of different size and varities were clandestinely manufactured and removed without payment of duty. Adjudication was made by order in original CCE/BBSR-II/03/2003 on 26.2.2003 and that was upheld by Tribunal in Appeal Case No.EDM-251-253/03 on 31.5.2005. 1.3 In the course of Audit conducted for the period from October 1996 to September, 1997, copies of Balance Sheet of the Appellant was called for and on failure of the appellant to provide the same, those were obtained from Andhra Bank for the period from 1995-96 to 1997-1998 and sales figures obtained from Income Tax Authority. Sales Tax officer, Bargarh also made the sales figure of the Appellant documents it was noticed that sale figures of springs leaves furnished by the Appellant to Excise authority was lower than the sales figures submitted to the above Authorities/concerns and reasons of discrepancy explained was unsatisfactory. 1.4 . It was also noticed from Past records of the appellant that in last five years, they had not paid duty out of PL Account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee that the theory of scale loss, burning loss etc. are baseless and untenable contention. Thus the assessee has totally failed to disprove the charges of suppression of production and surreptitious removal of excisable goods without payment of duty. The assessee being an unit operating under Self Removal Procedure since long, should be aware of various provisions of Central Excise Laws and is expected to maintain the prescribed Central Excise documents in a correct manner. Instead of assisting the Central Government in collection of its legitimate dues, the assessee has tried their level best to defraud the Government exchequer by surreptitiously removing the finished excisable goods without payment of Central Excise duty. Hence, the allegation of evasion of Central Excise Duty by suppressing the facts stands fully established against the assessee and they are liable to pay the Central Excise Duty as demanded in the instant Show Cause Notice. The details of the said duty demanded is calculated in the Annexure-C to the Show Cause Notice. However, in a similar issue i.e. for clandestine manufacture and removal of excisable goods i.e. M.S. Spring Leaves of different size ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Appellant to evade duty. He submitted that the appellant while manufacturing spring leaves, uses flats of different sizes. Activity of manufacture undergoes series of process and operations. At every stage of processing, normal loss occurs to the raw material depending on the quality of input. Series of activities involved give rise to huge invisible loss. Entire finished goods manufactured were accounted for and there was neither clandestine manufacture nor such removal. 2.2 He further submitted that there was no intention at all to evade duty for which the proceeding was time barred and penalty was also not leviable. But merely on surmise and suspicion, exercise was done to impute the appellant to charges through time barred proceeding when entire fact and figure were all along available year after year in record. Further, the sales figure obtained from Income Tax and Sales Tax Authority were not at all examined yearwise to ask for reason why there was difference. But a superfluous view taken. Therefore, the calculation made in Annexure D to Show Cause Notice was baseless and unreasonable. Consequently, the order of Adjudication is unsustainable. 2.3 The Ld. Counsel in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e process loss year after year, the appellant has made the Department to believe that its sale was very low whereas higher sales figures were shown in returns to both sales tax as well as income tax authorities. 3.2 Learned JDR further submitted that the process loss that was claimed by the appellant was unfair, exorbitant, excessive and unreasonable which resulted in pilferage of Revenue. The appellant was not fair to make payment of duty from PLA account but all along it was taking advantage of Modvat credit. They had also not filed declaration as required by rule 173B disclosing generation of scrap and marketability thereof. This was another mischief for suppression of production as well as clearance. There was also no basis to show the generation of unsaleable scrap and scaling loss. The percentage of loss shown to the Excise Authorities was 10% whereas the unsaleable scrap and scaling loss was not proved by evidence and thus claim of the Appellant was baseless. There was no record to show stages of manufacture of finished goods and the place of existence/storage thereof for the purpose of identification and inventory . The appellant has also failed to establish a standard rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales figures given to the Sales Tax Department and Income tax Department as well as Central Excise Department was worked out in annexure 'A' to the SCN and in reply to that notice, sale of different goods clubbed in sale was not proved by evidence. Huge discrepancy was noticed on comparison of figures submitted to Sales Tax, Income Tax and Excise Authority. Appellant explained that income from non manufacturing/was returned in Income Tax return. But that was baseless in absence of cogent, credible and convincing reason and evidence as well as proper reconciliation . Department also worked out the duty incidence in respect of 1MT of flat used for manufacture of finished goods and duty liability after giving CENVAT credit of ₹ 573/- as worked out in Annexure 'C-1' to SCN. This remained unexplained without proper reason. The appellant accordingly failed to assign any cogent reason for its defence against the allegation of clandestine removal of 807.264MT of goods worked out in Annexure 'D' to SCN except a bald reply that there was process loss and that was invisible. Pleas of the appellant was discarded for the reason discussed in para 13 in page 26 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as manufacture of such kind. The appellant failed to submit any reply against the allegation of the Department why minimum duty amount of ₹ 573/- was not payable by use of 1 MT of flat, more elaborately worked out in annexure C-1 of SCN. 4.7 The unaccounted flats/finished goods worked out in the Annexure 'C' to the Show Cause Notice also was without any contradiction for no standard input output ratio adopted to have been consistently followed by the appellant nor pleaded in defence with evidence. The appellant also did not lead any evidence showing behavioural pattern of generation of process/invisible loss by such industry. Learned Counsel for Appellant in the course of hearing relied on IS specification 3431-1982. But could not demonstrate how such specification helps the case of the Appellant. The Ld. Adjudicating Authority in para 11 at page 25 also held that tolerance on weight in the light of IS specification was not applicable to the product of the Appellant. This remained uncontroverted. The Ld. Adjudicating Commissioner also supported his reasons in para 15 (at page 26) finding that the balance sheets for the year 1996-1997 and 1997-98 depicted figures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was right to decide the matter in the impugned order on the basis of the probabilities of the case. To affirm so we also find support from judgement of Hon'ble Supreme Court in the case of C.C. V. Bhoormull 1983 (13) ELT 1546 (SC) and such decision followed in Kumar and B. Sivalingam vs. CCE-1992 (39) ECR 52 and Anoka Kohli vs. CC-2003 (158) ELT 225. 4.9 We have also gone through the various judgements cited by the Ld. Counsel but in absence of evidence adduced to prove wastage/process loss at every stage of production and generation of output, we do not consider that the appellant has brought to record any invisible loss that contributed to the quantum of production claimed by the appellant. The appellant has failed to bring its facts to fall within the fours of the judgements. Therefore, we have no reason to differ with the conclusion drawn by Learned Adjudicating Authority . 5. In view of the aforesaid observations and findings visible from record it cannot be held that there were invisible process loss contributing for generation of finished goods at a lower rate and on consideration of relevant factors, taking into consideration totality of facts and circumstances, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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