TMI Blog2019 (6) TMI 508X X X X Extracts X X X X X X X X Extracts X X X X ..... is nothing but mathematical projection. Clandestine clearance is required to be substantiated by means of tangible evidence placed on record by Revenue on the basis of investigation. In the present case, we note that other than mathematical projection, no further investigation has been recorded by the Revenue in the form of investigation at the end of the buyers of the allegedly clandestinely cleared goods. As such, we are not inclined to uphold the said demands raised only on the basis of projection. In the case of Ambey Laboratories Vs. Commr. of Central Excise, Delhi-I [ 2017 (6) TMI 374 - CESTAT NEW DELHI] ], one of the issues considered by the Tribunal was allegation of clandestine clearance made on the basis of production estimated based on input output ratio. The Tribunal set aside such demand where no corroborative evidence has been produced by the Revenue supporting the clandestine clearance of goods. The demand for duty arise on the allegation of clandestine removal cannot be sustained - appeal allowed - decided in favor of appellant. - Excise Appeal No. E/419/2008 - FO/A/75462/2019 - Dated:- 29-3-2019 - SHRI P.K. CHOUDHARY, JUDICIAL MEMBER And SHRI V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sleaves manufactured sold Scrap manufactured sold Total Value (Rs.) Ex. Duty involved (Rs.) %ag e Qnty (MT) Qnty (MT) Value (Rs.) Qnty (MT) Value (Rs.) 1 2 3 4 5 6 7 8 9 10 11 3260.02 735.531 0.01 0.326002 735.205 661.684 13895374 73.520 375763 14271138 22,83,382 NB : 1. %age of Sleaves and scraps to flats used are 90 and 10 respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The Jurisdictional Commissioner decided the issue in de novo proceedings by issue of original order vide No. 13/08 dated- 17/06/2008. In compliance with the directions of the Tribunal, he carried out certain verifications at four different manufacturers who were engaged in the manufacture of similar goods so as to ascertain the waste/loss arising during the course of manufacture. The copies of the verification reports were made available to the appellant to give them an opportunity to rebut the same. The summary of said verification was as follows: Sl. No. Name of the Commissionerate Name of the Unit Type of waste/loss claimed by the unit as reported by the Commissionerate Remarks 1. Ludhiana M/s. Akal Springs Ltd,, Ludhiana Shearing end cutting wastage 2.5% Hot end cutting centre punching 2% Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory were not the latest but included a furnace which was old. Further, it was submitted before the Adjudicating Authority that the amount of loss was also depending upon the quality of the MS plates used in the manufacture. They submitted a copy of the erstwhile Rule 173 of Central Excise Rules, 1944 in which they had intimated the Department that in cases where quality A scrap is used, the losses will be of the order of 5 to 15% but in cases where the poor quality of waste is used , the losses will be much higher and would be of the order of 25 to 40%. 8. Finally, the appellant contended that by taking into account the pouring and burning loss; burning and scale loss as well as tolerance, the total recorded loss which was of the order of around 22.46% which was reasonable and as such, they claimed that it cannot be alleged that the appellant has indulged in clandestine clearance of the Springs. 9. The Adjudicating Authority after taking into consideration all the arguments advanced before him, adopted the ratio of 3.04% as admissible towards burning loss. In addition, he also reckoned the yield in the manufacture of Spring Leaves as 90% and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 (Tri.-Mumbai) Demand and penalty, on the basis of application of input/output ratio, is not sustainable in law : (5)-Kiran Pondy Chems Ltd. (Unit-I) Vs. CCE, Trichy-2009 (248) ELT 434 (Tri.-Chennai) (6)- Ambey Laboratories Vs. CCE, Delhi-I-2017 (6) GSTL 175 (Tri.-Del.) and (7)- CCE ST, Ahmedabad-III Vs. Bhavani Ceramic Pvt. Ltd. - 2017 (351) ELT 326 (Tri.-Ahmd.) 12. The Ld. Advocate finally submitted that the Department has projected the demand on the basis of mathematical calculations and as such, clandestine removal cannot be sustained. The total loss which is indicated by the Department is within normal for the manufacture of Leaf Spring. 13. The Ld. D.R. justified the impugned order. His submissions are recorded below: (i) He submitted that the Chartered Engineer s certificate submitted by the appellant is vague and not in detail. The certificate has indicated a loss of upto 20% without giving any further details.. (ii) He emphasized that the CESTAT in the last round of litigation has already observed that the plea of limitation is rejected that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actual quantum of goods which could have been manufactured by the appellant by using inputs in the form of Plates. The total quantity of inputs procured and issued for manufacture has been ascertained from the appellant s record but the total quantity of goods which could have been manufactured out of such goods is nothing but mathematical projection. 20. Clandestine clearance is required to be substantiated by means of tangible evidence placed on record by Revenue on the basis of investigation. In the present case, we note that other than mathematical projection, no further investigation has been recorded by the Revenue in the form of investigation at the end of the buyers of the allegedly clandestinely cleared goods. As such, we are not inclined to uphold the said demands raised only on the basis of projection. 21. In the case of Ambey Laboratories Vs. Commr. of Central Excise, Delhi-I reported in 2017 (6) G.S.T.L. 175 (Tri.-Del.), one of the issues considered by the Tribunal was allegation of clandestine clearance made on the basis of production estimated based on input output ratio. The Tribunal set aside such demand where no corroborative evide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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