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2019 (4) TMI 2057 - AT - Central ExciseClandestine removal - allegation of non production of finished goods i.e. M/s TMT bars as per the norms fixed by the SAIL - HELD THAT - An identical issue came up for consideration before this Tribunal in M/S H.R. STEELS PVT. LTD. VERSUS CCE ST ALWAR. 2018 (12) TMI 1950 - CESTAT NEW DELHI where it was held that the show cause notice proposed to follow the output norm being obtained by the SAIL which is highly complex integrated plant having latest technology and infrastructure. It is not possible for the unit like appellant to have as same technology and infrastructure as available to the SAIL in this case and the production norm is treated to be identical. The department has not taken this much of the evidence into account by alleging the clandestine removal on the part of the appellant. In the present appeal also it is the allegation of the Department that the Appellant clandestinely removed the MS TMT/ bars that would have been produced by the Appellant following the production norms as fixed by the SAIL for ISO companies - No evidence was led by the Department regarding use of raw material electricity sale of material or mode or transport nor any evidence was led to substantiate that the Appellant was using the same advanced technology as SAIL. The impugned demand is therefore not sustainable. Appeal allowed - decided in favor of appellant.
Issues:
- Appeal against order confirming demand under Central Excise Act, 1994 with penalty and interest. - Allegation of non-production of finished goods as per norms fixed by SAIL. - Clandestine removal of goods without payment of duty. - Comparison with a previous tribunal decision on a similar issue. Analysis: 1. The appellant challenged an order confirming a demand of Rs. 4,12,70,404 under the Central Excise Act, 1994, along with penalty and interest. The impugned order was based on a Show Cause Notice dated 20/04/2015 issued by the Adjudicating Authority, which the appellant sought to appeal before the Tribunal. 2. The case revolved around the appellant, a Central Excise registrant engaged in manufacturing steel bars, being accused of not meeting production norms set by the Steel Authority of India Limited (SAIL). The discrepancy was identified during a test check by the officer of the Accountant General, revealing short production of MS bars leading to a demand for duty payment. 3. During the hearing, the appellant's advocate and the Authorized Representative for Revenue presented their arguments before the Tribunal. 4. The main issue in this appeal was the alleged non-production of finished goods, specifically TMT bars, in accordance with the norms established by SAIL. The Department claimed that the goods were clandestinely removed without paying the required duty. 5. Reference was made to a previous Tribunal decision in M/s HR Steels Private Limited vs. Commissioner of Central Excise, where a similar issue was addressed. The decision highlighted the lack of evidence regarding clandestine removal and emphasized the complexity of production norms set by SAIL, which may not be feasible for all manufacturers to achieve. 6. The Department accused the appellant of clandestinely removing MS TMT bars that should have been produced following SAIL's production norms for ISO companies. 7. The Tribunal noted the absence of evidence regarding raw material usage, electricity consumption, sale of goods, or technological capabilities comparable to SAIL. Drawing parallels with the previous decision, the Tribunal found the impugned demand unsustainable and ruled in favor of the appellant. 8. Consequently, the Tribunal allowed the appeal, setting aside the impugned order based on the lack of substantiated evidence and the similarity to the precedent established in M/s HR Steels case. This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the Tribunal's decision in this case.
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