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2019 (12) TMI 106

..... emand has been dropped by the adjudicating authority below for want of any concrete/corroborative evidence and holding that the entries found in the 3rd parties document are not reliable - HELD THAT:- No doubt, the statement of Mr. Kejriwal has recorded inability on his part to give the details about the noticed shortage. However, the fact still remains is that based upon the noticed shortage department has alleged the clandestine removal and that it has already been observed by the adjudicating authority below that Department is not able to prove the allegations. Law has been settled by catena of judgments that clandestine removal is a serious charge. The burden to prove the same is required to be discharged by the Department by production .....

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..... upon those documents and even the statement of the proprietor of said Kailash Traders that the show cause notice dated 04.02.2011 was served upon these appellants alongwith various other traders/buyers in the similar trade. Search was conducted in the premises of appellants also on 4th February, 2007 and show cause notice was served proposing the demand of Central Excise duty of ₹ 1,24,71,399/- in respect of 7081.293 MT of sponge iron alleging the same to have been cleared clandestinely during the period from 2005-06 to 2007-08. A demand of ₹ 4,16,234/- was also proposed as against the shortages of 227.540 MT of sponge iron as detected during the search on 10th August, 2007. The interest at the appropriate rate and the proportio .....

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..... t was brought to the notice while submitting defence argument, that the appellants are recording production in Silos by dip reading method since inception, which may have resulted into the noticed short coming. Otherwise also mere visible examination is not the correct criteria of establishing the shortage, that too, for confirming the allegations as that of clandestine removal. While relying upon case law in the case of Commissioner of Central Excise, Kanpur vs. Frontline Metal Pvt. Ltd. reported in 2017 (357) E.L.T. 715 (Tri.-Del.), Continental Cement Company vs. Union of India reported in 2014 (309) E.L.T. 411 (All.), ld. Counsel has prayed for setting aside the confirmation even of the demand of ₹ 4,16,234/-, the interest and the .....

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..... has not investigated the following aspects : (i) To find out the excess production details. (ii) To find out whether the excess raw materials have been purchased. (iii) To find out the dispatch particulars from the regular transporters. (iv) To find out the realization of sale proceeds. (v) To find out finished product receipt details from regular dealers/buyers. (vi) To find out the excess power consumptions. 13. Thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department. 6. While complying the directions of remand the adjudicating authority vide the order under challenge has observed that the allegation of clandestine removal are ba .....

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..... imation only, the same cannot be held to be convincing corroborative evidence even qua the alleged shortage. This Tribunal in the case of Chandpur Enterprises Ltd. vs. CCE, Meerut-I reported in 2014 (310) E.L.T. 904 (Tri.-Del.) has already held as follows:- When it is an admitted position that the quantity of the finished goods was determined on the estimation basis only and the quantity of scrap was determined on eye estimation, the alleged shortage of scrap and MS ingots cannot be treated as real shortage and the goods allegedly found short cannot be treated as having been cleared clandestinely without payment of duty. 8. The adjudicating authority below has taken the statement of Mr. Kejriwal to be an admission qua the noticed shortage. .....

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