2015 (10) TMI 1321 - AT - Central Excise

Duty demand - Clandestine removal of goods - Held that - Allegation of claim of excess burning loss is alleged in the show cause notice without any tangible evidence why the burning loss is not more than 2%. But Chief Commissioner, Chandigarh himself observed in the circular dated 13.11.2011 that burning loss in respect of hot re-rolling mill may vary from 1-2% to 6-7%. If the said circular would have been appreciated by the adjudicating authority, the adjudicating authority has dropped the demand against the respondents. The same thing has been examined by the Commissioner (Appeals) in the impugned orders that in such industry burning loss may extend to 6-7% on the basis of certificate from National Institute of Secondary Steel Technology dated 1.9.2011. The same is acceptable and reliable evidence in support of the respondent. - No infirmity in impugned order - Decided against Revenue.

Summary

Issues: Allegation of excess burning loss leading to clandestine removal

Analysis:
The Revenue filed appeals against the Commissioner (Appeals) order dropping the charge of clandestine removal against the respondents. The case involved the claim of burning loss by M/s. Chopra Steel Strips and M/s. Jai Sidh Yogi Rolling Mills, Khanna, which was found to be 5% and 5.88% for their final products during an audit. The Revenue alleged that the burning loss should not exceed 2% and accused the respondents of clearing goods clandestinely under the guise of excess burning loss. The adjudicating authority confirmed the duty demand, interest, and penalty. The Revenue contended that the excess burning loss claimed by the respondents was not permissible beyond 2%. On the contrary, the respondents argued that the burning loss could vary based on industry standards, citing a circular and a certificate from the National Institute of Secondary Steel Technology. The Commissioner (Appeals) dropped the demand against the respondents, considering the industry standards and lack of tangible evidence supporting the Revenue's claim.

The Tribunal noted that the circular issued by the Chief Commissioner mentioned that burning loss in hot re-rolling mills could vary from 1-2% to 6-7%. The Commissioner (Appeals) also relied on a certificate from the National Institute of Secondary Steel Technology, dated 1.9.2011, which indicated that burning loss in such mills could range from 2% to 6-7%. The Tribunal found these documents to be acceptable and reliable evidence supporting the respondents' position. The Tribunal concluded that the impugned orders dropping the charge against the respondents were justified based on the industry standards and lack of concrete evidence against the respondents. Therefore, the appeals filed by the Revenue were dismissed, upholding the impugned orders.