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M/s. Shillong Ispat & Rolling Mills Versus Commissioner of Central Excise & Service Tax, Shillong

2016 (8) TMI 748 - CESTAT KOLKATA

Invokation of extended period of limitation - Section 11A(1) of the Central Excise Act 1944 - Clandestine removal of goods - availed area based exemption vide Notification No.32/99 dated 08.07.1999 granting 100% duty exemption - Held that:- the charges of clandestine removal are serious charges and in the absence of any evidence of removal/seizure of finished goods, it cannot be held a justifiable ground for confirmation of the act of clandestine production and removal. We also find that there w .....

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itled to cash refund of the duty paid through PLA. - There is nothing on record to indicate that the appellant assessee had infact manufactured the final products out of the inputs on the basis of input-output ratio. As such, in the light of various decisions relied upon by the appellant, and in the absence of any concrete evidence of clandestine manufacture/removal of the goods, the impugned order is not sustainable. - Decided in favour of appellant - Appeal No. E/517/2012 - Final Order No. .....

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respectively 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 ₹ 1,01,25, .....

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framed charges of suppression of production and clandestine removal without adducing any corroborative evidences. Further, the DSIR report is based on the study of technology used in arc furnace and the average yield has been taken accordingly whereas, the appellant s unit is having induction furnace which does not have any fixed percentage of recovery. The report of DSIR collected from their website, mentions average yield and not the actural yield. Therefore, the study report does not have an .....

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erely on presumptions and assumptions and it has been wrongly alleged that the yield is less than the industry average. At the time of verification, no anomalies regarding electricity consumption vis-vis production records were noticed. No discrepancy was 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/st .....

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has been no willful suppression of material facts; That Show Cause Notice was issued on 29.12.2011 by invoking the extended period under provisions to Section 11A(1) of the Central Excise Act 1944 for the period 2007-08, 2008-09 and 2009-10. There was no suppression of fact regarding production, clearance and value of the goods. That all the facts have been reported in the monthly statutory reports to the Central Excise authority, from time to time, in the manner prescribed by the Department, wh .....

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ssioner of C.Ex., Meerut-I, reported in [2009(237)ELT 674 (Tri.Delhi), as upheld by the Hon ble Allahabad High Court [2011(269) E.L.T. 337 (All.)]. That SLP filed by the Revenue before the Hon ble Supreme Court stands dismissed [2011(269) E.L.T. A108 (S.C.)]. That in the instant case no evidence to the above effect have been brought on record. Hence, Order-in-Original dated 04.06.2012 may be set aside. He also relied on plethora of other decisions and filed copies of all the judgments alongwith .....

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0% 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. That on the basis of facts available on record the appellant has suppressed the production records and resorted to clandestine removal of the manufactured goods without payment of duty. For resorting to clandestine removal, no records of the suppresse .....

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-out norms are therefore, taken from the Report of the Government of India, Department of Scientific & Industrial Research, Ministry of Science and Technology, where it has been indicated yield of M.S.Ingot from M.S. scraps at 92%, Sponge iron at 85% and Pig iron at 94%. 4. Heard both sides and perused the appeal records. The sum and substance of the facts discussed above is that the Adjudicating Authority has neither brought out any reasons for arriving at the conclusion nor supported by an .....

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tory 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, the res .....

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, if any, taking also into account the consumption of various inputs, requirements of labour, material, power supply and the conditions for running the plant together with the attendant facts and circumstances. The Tribunal further observed that no experiment have been conducted in the factories of the appellants for devising the consumption norms of electricity for producing on MT of steel ingots. Tribunal also observed that the electricity consumption varies from one heat to another and from o .....

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