TMI Blog2016 (10) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... e of manufacturer suppliers of ingots itself has not been supported with adequate evidence further demand based on such purported excess production of raw material cannot stand. Further, we also note that average consumption of electricity was worked out in respect of M/s Magnum Steels Limited based on the consumption of particular period. The respondents contended that if average has to be worked out of the consumption the data should be taken for the entire year. In that case the average consumption will get altered and the calculation of alleged excess production will not be sustainable. The demand of duty of such substantial nature cannot be sustained on piecemeal evidence which are uncorroborated. The case of the Revenue has serious infirmities both in law and in fact. Even considering the general principle that in the case of clandestine removal cannot be established by precise and mathematical corroborative evidence, the minimum legal requirement is a preponderance of probability atleast to sustain the allegation. On careful analysis, we find that the case of Revenue against the assessee is full of presumptions and projection with unexplained gaps in analysis of facts wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e manufacture and clearances do not survive against any of the notices. So ordered. 2. The Revenue is aggrieved by the above finding. The main grounds of Revenue s appeal are summarised as below: (I) CASE AGAINST M/S B. R. ASSOCIATES PVT. LIMITED: (a) The document recovered from Sh. R. C. Sharma, Manager clearly indicated that during the period from 01.04.1999 to 27.04.1999 M/s B. R. Associates Pvt. Limited and M/s I. R. Industries Pvt. Limited were producing much more than what is recorded in the RG-I register. (b) There are cases of electricity theft booked by MPSEB against these units on 01.10.1999. This supports the department claim for suppression of production. (c) The duty calculation was made based on electricity consumption based on production of private records maintained by Sh. R. C. Sharma from 01.04.1999 to 24.04.1999. The detailed production was accordingly fixed and duty demand for the impugned period was calculated. (II) CASE AGAINST M/S I. R. INDUSTRIES PVT. LIMITED: (a) The private record maintained by Sh. R.C. Sharma shown datewise shiftwise production for the period 01.04.199 to 27.04.1999. The unit is using generator for power generation. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnum Steel Limited, the case against M/s Magnum Steels Limited was made for unaccounted manufacture and clearance of items made out of such inputs received from these two units. 5. In the written submissions made by the respondents each one of the grounds of appeal have been contested and comments given by the respondent. 6. We have carefully perused the grounds of appeal and the findings of the original authority. The main basis of the proceedings against the respondents is certain chart prepared by Sh. R.C. Sharma containing details for 27 days. The demand against the two respondents related to the period 01.04.1995 to 30.09.1999 covering 4= years against the third respondent for 20.11.1997 to 30.9.2019. Details in the chart formed basis for projecting clandestine manufacture and clearance for the impugned period. The original authority examined the chart in detail. It is seen that there were serious inconsistencies in the entries as well as the purported meter reading for electricity. The meter reading as on 27.04.1999 was shown higher than the meter reading later given by the electricity department in their monthly bill as on 30.04.2016. Further, we also note that the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e electricity consumption alone has been used to work out the probable production and that two for only 24/27 days. There is nothing to indicate as to how the average production derived could be taken as the standard production and was not a one time achievement. The excess production has not been established in the case. Here it is worthwhile to mention that for working out the demand, only 24/27 days of production written on a piece of paper recovered from a person who has been disowned by the noticee No. 2 3, can not be taken as a proof. As regards, the electricity consumption it depends upon the line losses, efficiency of panels etc. Moreover, at the most, if one month consumption was to be taken, this could have been somewhere during the middle of the period. Also, with the passage of time the efficiency of electrical/ mechanical instruments tend to decline about which no mention has been made. 9. The original authority proceeded to examine various case laws on this aspect more specifically regarding demand based on electricity consumption and concluded that production based on estimation basis without any corroboration cannot be the basis for duty demand. In the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided cases before concluding that the evidence available in the case cannot establish the purported unaccounted production of excisable goods by these three manufacturing assessee. 12. On careful consideration of the grounds of appeal and the impugned order, we find that the demand of duty of such substantial nature cannot be sustained on piecemeal evidence which are uncorroborated. The case of the Revenue has serious infirmities both in law and in fact. Even considering the general principle that in the case of clandestine removal cannot be established by precise and mathematical corroborative evidence, the minimum legal requirement is a preponderance of probability atleast to sustain the allegation. On careful analysis, we find that the case of Revenue against the assessee is full of presumptions and projection with unexplained gaps in analysis of facts which are too many too gloss over. We find that to arrive at a contrary conclusion other than the one arrived by original authority we are not presented with sufficient supportive evidence in the appeals by the Revenue. Accordingly, the appeals are dismissed. ( Pronounced on 17.10.2016 ) - - TaxTMI - TMITax - Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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