2013 (12) TMI 702 - AT - Central Excise

Clandestine manufacturing and removal of final product Unaccounted billets received GRs issued to various transporters Held that - There is no investigation about receipt of the billets at the appellants end or no evidence stand produced by the Revenue as regards manufacture and clandestine clearance of the appellants final product - The buyers, to whom the cleared final product stand received have also not been identified by the Revenue - Relying upon Modern Steel Industries vs. CCE, Meerut 1999 (6) TMI 304 - CEGAT, NEW DELHI - the appellants have strongly contended that there is no even an aolta of evidence against the appellants and merely because the dealers of M/s Nova Steel Udyog Ltd. have used the appellants name in the GRs of the transporters, by itself cannot be held to be conclusive evidence of receipt of the billets Decided in favour of assessee.

Summary

Issues:
Demand of duty based on allegations of clandestine manufacture and clearance of final product.

Analysis:
The judgment pertains to an appeal by a rolling mill for steel products against the confirmation of a duty demand of Rs. 9,03,472. The allegations were based on clandestine activities of another entity, Nova Steel Udyog Ltd., involving the manufacture and clearance of MS billets without duty payment. These billets were then sold to various traders, including the appellant, who allegedly used them in their final product without paying duty. The Revenue's case relied heavily on goods receipts (GRs) issued by transporters showing the appellant's name. However, no direct evidence was presented regarding the receipt of billets by the appellant or the clandestine clearance of the final product. The appellant argued that mere appearance of their name in GRs was insufficient evidence.

The Tribunal highlighted previous cases where similar evidence was not considered conclusive. In one instance, the Tribunal ruled that evidence based solely on GRs was not sufficient to hold against the assessee. Additionally, it was noted that the appellant could have availed Modvat credit if they had received the goods, indicating no intention to evade duty. The manufacturer of the billets was identified as Nova Udyog Ltd., and duty, if applicable, should be determined against them. The Department failed to provide evidence of clandestine conversion or removal of the final product, leading to the appeal being allowed in favor of the appellant.

Given the settled nature of identical matters arising from the same investigations involving Nova Steel Udyog Ltd., the Tribunal decided to set aside the impugned order and allow the appeal, providing consequential relief to the appellant. The judgment was pronounced on 01/05/2013 by Ms. Archana Wadhwa.