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2016 (9) TMI 1016 - CESTAT NEW DELHI

2016 (9) TMI 1016 - CESTAT NEW DELHI - TMI - Suppressed production of clandestine clearances of goods without payment of duty - approximation production considering average yield of the product viz. zinc oxide out of the raw material issued - department has not gone beyond the approximation of yield shown as 70 to 84% - average yield overall had been shown as 77.60%. - Demand alongwith interest and imposition of penalty. - Held that:- there is nothing on record from the Revenue side to come .....

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ion and clandestine clearance by the appellants. In this regard we seek support from Honíble Allahabad High Courtís decision in the case of Continental Cement Company Vs. Union of India [2014 (9) TMI 243 - ALLAHABAD HIGH COURT] and Supreme Courtís decision in the case of Oudh Sugar Mills Ltd. Vs. Union of India [1962 (3) TMI 75 - SUPREME COURT OF INDIA] and CESTATís in the case of Punalur Paper Mills Ltd. Vs. CCE [2008 (8) TMI 471 - CESTAT, BANGALORE]. In view of the above, the impugned order in .....

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the said duty does not warrant any intervention from this Tribunal. It is hereby sustained. - Appeals disposed of - E/2058-2059/2009-Ex.(DB) - Final Order No. 53232-53233/2016 - Dated:- 26-8-2016 - Mr. Justice (Dr.) Satish Chandra, President and Mr. Ashok K. Arya, Member (Technical) Shri A.R. Mahdav Rao, Advocate- for the appellant Ms. Neha Garg, D.R.- for the respondent ORDER Both the sides have been heard in detail. 2. The appellants M/s Mittal Pigment Pvt. Ltd. and Shri Ramesh Kumar Agarwal, .....

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penalty of ₹ 40 lakhs has also been imposed on Shri Ramesh Kumar Agarwal, Director of the appellant company under Rule 26 of the Central Excise Rules, 2002. 3. The respondent is Commissioner, Central Excise, Jaipur-I. The case of the Revenue is that as the appellant No. 1 is a manufacturer of Zinc Oxide, who during different periods depending upon the form of raw material have had different yields of the product viz. Zince Oxide, but the yield has to be in the range of 70% to 84%, which c .....

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xcise, Jaipur-I vide his order in original (O-I-O) dated 19.5.2009 confirmed the duty demand of ₹ 2,30,39,602/- along with interest. 4. The appellants have been represented by ld. Advocate Shri Madhav Rao, who has inter alia submitted as under : (i) Annexure A to the show cause notice (at page 20 of the appeal) shows that on an average the output for all the periods under consideration has to the extent of 77.60%. For the year 2002-03 the yield has been 94.41% and there is no demand, simil .....

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indeed they cannot be fixed considering that any number of impurities are present in the input also varying from batch to batch, and there is no standard input with standard predetermined quantity of zinc. In the statement itself which is relied upon, extracted at page 35 (of Paper Book) it has clearly come out that from zinc dross the output would be 70 to 80% and from scrap 50 to 70% for the recovery of zinc oxide. A perusal of pages 49/50 (of appeal) shows that the input basket will have mate .....

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to dispatch particulars from transporters, realisation of such level of sale proceeds, finished products received details from the buyers, excess power consumption required for such a volume of manufacture would surely be available. However, the Department has not led in any evidence whatsoever in this regard. The allegation of clandestine removal has to fail on the strength of the decision of the Hon ble Allahabad High Court in the case of Continental Cement Company Vs. Union of India - 2014 ( .....

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se of the Director the penalty may kindly be set aside. 5. We have carefully considered the facts on record and the submissions of both sides along with the case laws cited. 6. Revenue has made out its case of suppressed production of clandestine clearances of goods without payment of duty solely on the basis of approximation production considering average yield of the product viz. zinc oxide out of the raw material issued, which has been in the nature of different varieties like zinc dross, zin .....

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iginal confirming the suppressed production and duty is not correct, considering the varieties of zinc scrap like Saves, Scabs, Scribe and so on used by the appellant. 6.1 Further the department has not gone beyond the approximation of yield which they have shown as 70 to 84% in col.3 of Annexure-A attached to the show cause notice and average yield overall had been shown as 77.60% which has been made the basis for issuance of the show cause notice (SCN) as well as for confirming the duty of cen .....

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so conclude on extra production by approximation and by a mere statement of the Director of the company. Unless there are further corroborations in the form of documentary evidences, which could be like despatch details for the production, receipt details of the said material, transactions of the sale money, transportation details of such goods, details of additional consumption of electricity for such suppressed production a prudent individual would not agree with the present conclusions of the .....

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charged its burden of conclusively proving the case of suppressed production and clandestine clearance by the appellants. In this regard we seek support from Hon ble Allahabad High Court s decision in the case of Continental Cement Company Vs. Union of India - 2014 (309) ELT 411 (All.) and Supreme Court s decision in the case of Oudh Sugar Mills Ltd. Vs. Union of India - 1978 (2) ELT (J.172)(SC) and CESTAT s in the case of Punalur Paper Mills Ltd. Vs. CCE- Vide Final Order No. 996-997/2008 dated .....

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