TMI Blog2004 (3) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... MS billets, described in the gate pass as MS ingots. The goods and the lorry were detained, the factory of the assessees was visited on 4-3-1993, registers were verified, which revealed that lorry intercepted on 3-3-1993 had left from their factory. Statements of various persons were recorded and records were also seized. Investigations revealed that the assessee had indulged in suppression of receipt of MS scrap, and suppression of production and clandestine clearance of MS billets and ingots and had also wrongly availed Modvat Credit on billets which had not been declared in the Modvat Credit declaration. Show Cause Notice, dated 31-8-1993 was issued proposing recovery of duty of Rs. 50,18,000/- on billets and ingots and MS Runner and MS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue. Credit was sought to be denied on the ground that credit of duty paid on scrap was availed on MS billets, which were not declared in the 57G declaration. The Commissioner has dropped the proceedings on the ground that during the period in dispute even the department has conceded that the products are only MS ingots. According to the Revenue, even after installation of continuous casting machinery in the factory in December, 1992, the assessees had declared their products as steel ingots and other primary forms under CET sub-heading 7206.90, that billets and ingots are 2 distinguishable products and assessees have maintained this distinction in their office records and that filing of declaration of final product is a substantive requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , while, only 80,138.364 MTs of ingots have been accounted for by the appellants; hence, duty is payable on the balance quantity of 4,979.315 MTs clandestinely removed. This inference has been drawn on the basis of production registers maintained by the appellants. This register reflects the total quantity of the scrap charged, which includes quantities of re-cycled scrap, which has admittedly gone into the production of MS ingots and consumed along with virgin scrap. The submission of the assessee is that MS scrap, which is the raw material, is put into the electric arc furnace and after melting and casting, final product emerges. Normally, the desired yield will be in the range of 90-92% under ideal conditions and there will be a burning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (6%) and in this heat also there is an invisible loss of 0.324 tonnes (9%). (iv) Total ingots produced is 90.406 tonnes (85+5.1+0.306) from the initial 100 tonnes of virgin scrap charged into the furnace. This ultimate yield of 90.406 tonnes is obtained by re-cycling 100 tonnes of virgin scrap in three heats. 7. The Commissioner has placed reliance upon the production registers, which the appellants accept, is a reliable document for the purpose of computing production. The Commissioner also notes that production registers reflect the total quantity of scrap charged, which includes re-cycled scrap and after taking into consideration consumption of both virgin scrap and re-cycled scrap, the average yield is worked out to 90%. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures have been taken from the production register, which is a reliable document and going by these figures there would be no time available to produce the alleged quantity cleared clandestinely. Yet another reason is that the average consumption of electricity PMT of ingot during the period in dispute is found to be 601-671 units, which is well below the norm of 851 units of electricity PMT of steel ingots as accepted on the basis of expert opinion in the case of Nagpal Steels Ltd., 2000 (125) E.L.T. 1147. Therefore, in the absence of any charge or finding of use of any other source of power, allegation of suppression of production cannot be sustained. We also note that even applying the formula of 90% yield, the ingots generated will only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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