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TMI Blog2018 (11) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... eging that the appellant has recorded lower quantity of finished goods in the Daily Stock Account (DSA) and has clandestinely removed the final products i.e. Pig Iron without payment of duty. The Adjudicating Authority confirmed the demand of duty alongwith interest and imposed equal penalty upon the appellant company and also imposed penalties on the Director and other Office Bearers of the appellant company. Hence, the present appeals before the Tribunal. 2. Ld. Consultant appearing on behalf of the appellants narrated the production process for manufacturing of Pig Iron which is summarized as under: i) The main raw materials required for manufacture of Pig Iron are Iron Ore, Coke, and flux items viz. Lime Stone and Dolomite, apart from electricity, which are smelted/processed in Mini Blast Furnace (MBF). Iron Ore is procured from indigenous sources viz. mine owners, traders, mostly from Orissa, Jharkhand. Coke is imported as also procured indigenously. Limestone, Dolomite, Quartzite and Manganese are procured from local sources. Electricity is procured from state utility of DVC Power Corporation as also from captive generation and Diesel Generating Sets. The quality and quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ladles and subsequent pouring into moulds or Pig Cast Machine (PCM) to give Pig Iron. The quality of the Pig Iron is ascertained/monitored through 'PCM slips'. The PCM slips bear the consecutive cast number, the dumper number vide which it collected the Pig Iron from the PCM and technical parameters of the product to identify/grade the finished product. There are different commercial Grades of the product depending upon the Silica content. The quantity of production is ascertained by way of computerized weighment slips and the same is recorded in the Cast Wise Register on the basis of which Daily Stock Account (DSA) is prepared and excise records are maintained. Ld. Consultant further submits that- During the course of search, while various documents, records and private records were seized, no discrepancy or irregularity was noted in the purchase and stock of raw materials, consumption of electricity/power procured from Grid or generated at the Captive Power Plant (CPP), stock and dispatch of finished goods etc. Further, no unaccounted cash or unaccounted stock of material etc. was also found in the premises of the Appellant. The DGCEI officials had also conducted search at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ron against SMS available in the inbox of mobile phone of Shri A.K.Mukherjee (05.07.2008 to 4.08.2008). 1,42,64,497/- iv) Demand against clearances of 17065.66 MT of Pig Iron/Skull/Scrap alleged to be ascertained from seized Note Book on the basis of Note Book during the period of 01.02.2007 to 03.05.2008. 5,40,81,093/- v) Demand against alleged clearances reflected vide SMS to Ravi Agarwal (April to June'08) of 8,086.02 MT of Pig Iron 3,09,87,178/- 6. We find that the entire case is based on the alleged SMS exchanged between the executives of the company. During the visit to the factory on 07.08.2008, the mobile phones of some of the executives were seized and taken away. After several months, the department on their own efforts produced listing of the purported SMS and its contents showing certain figures, which the SCN described as clandestine production and removal. It has been confirmed in the SCN (Para.27 page No.124) that they had approached the cell phone service providers to retrieve the SMS data but the cell phone service provider had refused the service since they did not have the backup data. That apart, the fact that the contents of the SMS were discretely asce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of illicit manufacture and clearance; (h) Proof of actual transportation of goods, cleared without payment of duty. (i) Links between the documents recovered during the search and activities being carried on in the factory of production; etc. We find that the Tribunal in the case of Commissioner of Central Excise, Patna Vs. Universal Polythene Industries [2001 (130) E.L.T. 228 (Tri.- Kolkata) has held as under: " It is well settled that charge of clandestine removal and clearance is a serious charge against the manufacturer which is required to be discharged by the Revenue by production of sufficient and tangible evidence. We do not agree with the Revenue's stand taken by them in the memo of appeal that standard of proof in such cases has to be necessarily on the basis of preponderance of probabilities and not on the basis of absolute proof." 9. We also find that the assessee had duly recorded the production of Pig Iron against each casting as per the weighment slips accompanying the PCM Slips. There is no allegation or finding in the SCN or the OIO that the assessee has not reported the production against each Cast. Reference of each any every Cast is serially availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of whom the alleged parallel set of invoices were raised, but did not find any irregularities at the customer's premises regarding the pig iron alleged to be supplied by the appellant M/s NML, whereas if the alleged material had been delivered to the said customer on 05.08.2008, unaccounted pig iron should have been found by the visiting officer and the documents relating thereto could also have been found at the premises of the said customer. However, on the contrary nothing irregular was observed by the DGCEI Officials and nothing has been mentioned in the impugned SCN or order in this regard. Statement from customers namely, Shri Shyam Industries Pvt. Ltd. & Durgapur Iron & Steel Co. Ltd., to the effect the search was conducted by the DGCEI in their premises and no incriminating records/ documents have been seized. It has been alleged that on comparing the weights of Pig Iron manufactured mentioned in the PCM slips and the attached Weighment Slips, recovered from the Courier Company, with the weight recorded in Cast-wise Register difference between the two records were found for certain cast Nos., wherein a lesser quantity is recorded in Cast Register. Furthermore, the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion/finding is purely a conjecture and devoid of any basis. A bare perusal of any PCM slip will reflect the same. Therefore, it is wrong to hold that the format of PCM slips was altered as a step for effecting clandestine clearance. 14. We find that the allegation has been raised on the basis of hypothetical and illogical input-output ratio of iron ore to pig iron at 1.233 MT, which if compared with the average ratio of comparable manufacturing units, is much lower. Ratio of 1.233 MT is practically impossible to achieve not only for NML but also for any other company in the same industry. It has been submitted by the Appellants that if it is held that 28181.65 MT of goods were cleared clandestinely over and above the recorded clearance of around 68854.81 MT, then the total production would come to 97036.46 MT. It is an admitted position that the company had consumed during the impugned period 90722.88 MT of iron ore (on net basis). This itself leads to an impossibility that the total production of hot metal is more than iron ore consumed. This clearly indicated that the contention of the revenue is not sustainable. 15. In view of the above discussions the impugned order is set a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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