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TMI Blog2020 (12) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... 2850.038 MT 5. Non-alloy blooms 60.040 MT 1530.018 MT 1469.980 MT 2. The department was of the view that finished goods totally valued at Rs. 22,76,79,686/- which were found short during the stock taking, had been clandestinely removed by the Appellants. 3. The department was also of the view that Notification No. 67/95CE dated 16-03-1995 was not applicable to the Appellants since it applied only to 'inputs' which are captively consumed and not to 'finished goods' as was the case of the appellants. 4. The department issued the show cause notice dated 15-09-2016 demanding Central Excise duty of Rs. 2,81,41,208/- along with interest. Penalties were proposed both against the company as well as their Managing Director, Shri Aditya Jajodia. 5. Demand was confirmed against the appellants by the adjudicating authority vide Order-in-Original No. DGR-EXCUS-COM-000-028-16-17 DT. 01-03-2017/02-05-2017. Equivalent penalty was imposed on the Company and a penalty of Rs. 10 lakhs on Sh. Aditya Jadodia, Director . The appellants are in appeal before us against this Order of the adjudicating authority. 6. Following submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e recording their statements that no stock taking had been done for a number of years. The Appellant's unit was commissioned 01.04.2008 whereas the sub-unit for production of DI pipes was commissioned on 01-08-2010. The difference noted in the stocks of various items was the accumulated difference over the whole of the production period. If one compares the shortages noticed at the time of stock taking with the quantity produced over the years the percentage difference comes to a miniscule amount as indicated in the table below: S. No: Descripti on of finished goods Quantity found physically in December , 2012 Stock as per DSA/ stock ledger Quantity produced from 1.4.2008 to 31.12.2012 Quantity found short at the time of stock taking Perce ntage on the basis of colum n (4) Perce ntage on the basis of colum n (5) (1) (2) (3) (4) (5) (6) (7) (8) 1 Ductile Iron pipes (D I Pipes) 85859.5 Mtrs 146085 Mtrs 47,57,070. 5 Mtrs (from 1.8.2010) 60225.5 Mtrs 41.2 3 1.27 2. Alloy 159.400 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udicating Authority. 6.8 The rejected DI Pipes which were recycled in the factory of the Appellants were eligible for exemption under Notification No. 67/95-CE dated 16-03-1995 as these items had been captively consumed in the manufacture of dutiable finished goods. The Adjudicating Authority has erroneously held that this notification applies only to 'inputs' and not to 'finished goods'. In this regard, attention is invited to the wordings of the above Notification . The word 'input' includes all goods covered in the First Schedule to the Central Excise Tariff Act, 1985, other than light diesel oil, high speed diesel oil and motor spirit. Hence, DI pipes are also 'inputs' as per the said Notification. The learned Adjudicating Authority has confused the definition of 'input' with that appearing in the Cenvat Credit Rules, 2004. Hence, the rejected DI Pipes captively consumed in the factory of the Appellant for further manufacture of DI pipe, were fully exempt from duty under Notification No. 67/95-CE dated 16-03-1995. Hence, no duty could have been demanded on these shortages. 6.9 The learned Commissioner has also held that No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 15.09.2016 for the alleged clearances in 2012. There is no ground for alleging any deliberate mis-statement or suppression of facts to invoke the extended period. At best it is a case of improper maintenance of records and not a case of clandestine clearance. Further, the unit had been subjected to EA-2000 Audit in March 2012 and no discrepancy in records was found. 7. The learned AR reiterated the findings of the adjudication order and submitted that the appellants had not been able to give any satisfactory explanation for the shortages and, therefore, the allegations in the show cause notice have been rightly upheld by the adjudicating authority. 8. Heard both sides through video conferencing and perused the appeal records. 9. We find that the charge of clandestine clearance cannot stand as the department has not been able to provide clinching evidence in support of the same. Clandestine clearance is a serious charge and has to be proved with positive evidence which is lacking in this case. The judgments cited by the appellants on this issue, in their favour, support their case. It may be noted that not even one buyer of the clandestinely cleare ..... X X X X Extracts X X X X X X X X Extracts X X X X
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