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M/s. Shree Nirmalanand Steel Casting (P) Ltd. Versus Commissioner of Central Excise

Clandestine removal of goods - MS ingots - MS runners and riser - Held that: - the appellant had taken the credit on the basis of invoices and in respect of the goods received in their factory. To confirm the demand on the basis of difference in figures in balance sheet and RG 1, without their being any further evidence either in the shape of statements of any of the employees of the appellant or in the shape of identifying the buyers, the transporters etc., the finding of clandestine activities .....

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M) - Order No. FO/53983/2016-(SM); - Dated:- 5-10-2016 - Hon'ble Ms. Archana Wadhwa, Member (Judicial) Ms Shreya Dahiya, Advocate for the Appellants Shri Dharam Singh, AR for the Respondent ORDER Per Ms. Archana Wadhwa As per facts on record, the appellant is engaged in the manufacture of MS ingots and MS runners and riser falling under Chapter 72 of the Central Excise and Tariff Act, 1985. As per the audit conducted in their unit for the period from September, 2007 to October, 2009, differe .....

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a clerical mistake for which they had already filed a CA certificate. There is no provision in the Income tax for acknowledgement from any authority. They have also filed the documents showing the opening and closing balance relating to consumption of raw material in which there is no difference. The purchases and consumption figure at the time of finalization of accounts is on account of clerical error. 3. The above explanation of the assessee was not accepted and they were issue a show cause .....

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n of penalties. 4. During the course of adjudication, the appellant contested the same on the ground that during the course of visit of audit team, neither any of excess of raw material nor the finished goods was found. The fact that all the raw materials and the finished goods were entered in the books of accounts stand established and as such, it cannot be said that there was any suppressed production or clandestine removal of their final product. The allegations are based upon inference invol .....

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in the purchase and consumption figures, at the time of finalization of accounts has occurred on clerical lapse. Such clerical lapse cannot be made ground for disallowance. The appellant also submitted that they recycled scrap like runner and risers used mould and scrap from slag and use it captively in their furnace with their raw materials, the quantum of such recycled scrap stand reflected in their records maintained for the said purpose. The same has not been taken into account. It stand wr .....

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Commissioner, however, did not find favour with the above pleas of the appellant and confirmed the demand to the extent of ₹ 28,01,436/- by disallowing the cenvat credit and also confirmed the demand of ₹ 6,66,412/- on the allegation of clandestine manufacture and removal. In addition, interest was also confirmed and penalty of identical amounts were imposed under section 11 AC of the Central Excise Act. 6. The said order of Additional Commissioner was upheld by Commissioner (Appeal .....

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r, in respect of consumption of 250.442 MT sponge iron and 832.431 MT of MS scrap. Primarily, the demand stand confirmed on the basis of above difference between the raw material register and the balance sheets for the year 2007-2008, 2008-2009. The Revenues allegations are that the appellants have availed the credit in respect of said raw materials which stand used by them in the manufacture of final product which was cleared clandestinely. 8. Apart from the fact that the appellant had explaine .....

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Arunachal Plywood Indus Ltd. vs. CCE, Shillong reported in [1999 (107) ELT 513 (Tri)], it was observed that difference in sale figures given in the balance sheet and RG I register for the corresponding period will not result in confirmation of demand inasmuch as the balance sheet is not prepared according to Excise law and procedure but the same is prepared in terms of Company Act. To the similar effect is another decision of Tribunal in the case of Steel Authority of India Ltd. vs. CCE, Bhubane .....

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