9911796707
TMI Blog2016 (8) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... ectively of the First Schedule to the Central Excise Tariff Act, 1985. The appellant is availing area based exemption vide Notification No.32/99 dated 08.07.1999 granting 100% duty exemption. During inspection and verification of stock physically on 21.10.09, it was alleged that the appellant has suppressed production of dutiable goods and has removed the same clandestinely without payment of duty. After due process of law, the Adjudicating Authority confirmed the demand of Rs. 1,01,25,018/- along with applicable interest and also imposed equal penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 15 of Cenvat Credit Rules, 2004. Hence, the present appeal. The appellant is represented by Shri Nihar Dasgupta, Advocate and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found in the appellant s records, regarding raw-materials, finished goods, production, clearances, opening and closing stock, work-in-progress, etc., That the Deptt. has not brought any evidence on record to show that additional steel ingots/steel castings were produced. It is submitted that no evidence has been brought on record to prove that any of these alleged excess production of ingots or TMT Bar was removed without payment of duty; There are catena of judgments including the judgment of the Apex Court which laid down that surmises and conjectures cannot be a ground for determining and computing duty on the goods alleged to have been produced; That Extended period of limitation cannot be invoked in the instant case, since there has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... synopsis of judgments. 3. Shri S.S.Chattopadhyay, Suptd.(AR) appearing on behalf of the Revenue submitted that there is wide disparity of realization of TMT etc. from M.S.Ingot during 2008-09, varying from above 100% to 93% as reported in the records and yield of MS Ingot at 72.8% is abnormally low, as the raw material contains ferrous metallic content above 90%, both in the case of Sponge Iron and M.S.Ingot. That taking a conservative estimate of yield from Sponge Iron at 85%, M.S.scraps at 90% and Pig Iron at 95%, based on the report of the Department of Scientific & Industrial Research, Ministry of Science and Technology, it is ascertained that the appellant has suppressed production of 20.40% at induction furnace during 2007-08. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses in the process claimed and also the method to be adopted to calculate the yield, the Adjudicating Authority should have considered all these facts before coming to a conclusion. It is observed that no experiment has been conducted in the factory of the appellant to strengthen that higher production of finished goods was possible. 4.1. It is a settled proposition of law that onus to prove clandestine removal is on the department, which could not be discharged on the basis of input-output calculation alone. 4.2. Case law of Commissioner of C.Ex., Meerut-I vs.- R.A.Castings Pvt. Ltd. (Supra), upheld by Apex Court, is relevant where Allahabad High Court hold as follows in paragraph -3: "3. Being aggrieved by the impugned orders, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her electricity consumption. It appears that Dr. Batra in his report has observed that for the production of 1 MT of steel ingots, 1046 units electricity required." 4.3. In the case of Commissioner of C.Ex., Meerut-I vs.- R.A.Castings Pvt. Ltd. (Supra) standard fixed by Dr. Batra, with reference to electricity units consumed for producing 1 MT of steel ingots alone was not considered sufficient evidence. Similarly in this appeal also DSIR norms alone cannot be accepted to calculate production by the appellant, in the absence of any independent studies/experiments done by Revenue. 4.4. We also observe that the charges of clandestine removal are serious charges and in the absence of any evidence of removal/seizure of finished goods, it cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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