TMI Blog2022 (1) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial determination by preponderance of probability fails at the precipice of the trial production to afford a leap of rational inference which no extent of dogma can bridge. The failure to maintain prescribed records are no less attributable to the lack of monitorial oversight prescribed under Central Excise Rules, 2002 than the probability of having been suppressed to disable investigations into possible evasion of duty. That mutual disregard of obligation cannot be the bedrock for presuming clandestine removals by application of formulae - there is nothing on record to indicate that the shortage of raw materials pertains to the period of the impugned demand or that scrap had been procured from unknown sources. These remain as blank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty liability of ₹ 1,97,98,599 under section 11A of Central Excise Act, 1944 and, for the period between August 2009 and July 2010, ordered recovery of duty ₹ 1,03,12,523 under section 11A of Central Excise Act, 1944 respectively along with applicable interest under section 11AB of Central Excise Act, 1944 besides imposing penalty of like amount under rule 25 of Central Excise Rules, 2002 on the assessee and on the Director of the appellant-company. 2. Essentially, the proceedings initiated in the respective show cause notices dated 11th May 2009 and 1st September 2010 were in continuation of notice for the period from 2003-04 to 2007-08 alleging clandestine production of mild steel ingots from sponge iron , pig iron , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and of the Hon ble High Court of Jharkhand in Om Shanti Steel Castings Pvt Ltd v. Union of India [(2017) 347 ELT (Jhar)] and in Balashri Metals Pvt Ltd v. Union of India [(2017) 345 ELT 187 (Jhar)] on the unreliability of standards as the basis for inferring clandestine production and clearance of manufactured goods. 4. It was also contended that the production slips, pertaining to December 2001 and November 2002 and relied upon to uphold the demand, seized in February 2004 lacked credibility in the absence of confirmation through experimental operation by qualified electrical engineers at the time of seizure. Learned Counsel also pointed out that power consumption of 1254 units and 1200 units during the two shifts operated under sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present demand. According to her, the resolution of the dispute in favour of the assessee by the Tribunal for the earlier period had been based on the observations pertaining to the reliance placed on the study conducted by Indian Institute Technology, Kanpur (famously referred to as the technical report of Dr NK Batra), the computation of power consumption on the basis of private production slips of an even earlier period and the trial production under central excise supervision which differed vastly from the basis adopted by the adjudicating authority. She contends that, insofar as the present appeals are concerned, the approach to these issues had been elaborately discussed in the impugned order and that, following from the lack of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of bazaar scrap, make the reliance on production slips of 2002 acceptable. 8. It is also contended that the authenticity of the production slips maintained by the employees of the appellant-assessee, the practice of reverse computation of material deployed, the non-availability of heat register for the impugned period and the acknowledgement of the documents in the statement of the appellant-Director suffice to establish the legality and propriety of the impugned order. 9. There is no doubt that, for the appellant-assessee, electrical energy is the most significant input and that the production slips for a particular part of the period prior to the present demand did indicate power consumption of 687 units per metric ton of product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction slips, and the claimed consumption for the impugned period may appear to be improbable but that does not, of its own, signify impossibility. The absence of any corroborative evidence and, indeed, of any trail of investigation into the supply chain puts paid to the hypothesis of clandestine production. The concatenation of income from the weighbridge with sale of clandestinely removed goods is a proposition that remains merely so in the absence of any evidence, however remote, and the jurisdictional competence of central excise authorities to demand explanations rightly devolving on other agencies. 11. In the absence of any supporting evidence, it would appear that the duty leviability on manufacture is sought to be imposed on seem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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