2005 (1) TMI 191 - AT - Central Excise

Demand - Benefit of SSI Exemption - Value of clearances - Clubbing of the clearances​​​​​​​ - manufacture of Cement - suppression of production and clandestine removal - HELD THAT - The case of the Revenue rests on the discrepancy between the quantities of raw material in the Form-IV Register and the private document seized from appellant No. 1. There is no other corroborative evidence at all. It is also seen that the appellants have satisfactorily explained the discrepancy between the private records and Form-IV register. The Revenue has not carried out a thorough investigation to unearth at least few evidences of buyers receiving the alleged clandestine removals of the appellants. There is no case of excessive consumption of electricity, etc. Revenue has not at all made a strong case against the appellants. Thus, the confirmation of demand on the alleged excess production cannot be sustained. Hence, there is no case for demanding duty and levying penalties on appellants 1, 2 and 3. Therefore, we allow the appeals of appellants 1, 2 and 3 with consequential relief, if any.

Summary

Issues:
The issues involved in the judgment are suppression of production, clandestine removal, irregular availment of SSI exemption, and clubbing of clearances.

Suppression of Production and Clandestine Removal:
The case involved two Private Limited Companies engaged in the manufacture of Cement, availing the benefit of SSI Exemption. The Revenue alleged suppression of production, clandestine removal, and irregular availment of SSI exemption. The adjudicating authority confirmed the demand for clandestine removals on both companies and imposed penalties. However, the Tribunal found discrepancies in the Revenue's case, noting that the appellants satisfactorily explained the discrepancies between private records and official registers. The Revenue failed to provide corroborative evidence or demonstrate excessive consumption of resources. As a result, the demand for duty and penalties was not sustainable, and the appeals of the companies were allowed with consequential relief.

Irregular Availment of SSI Exemption:
Regarding the irregular availment of SSI exemption, the adjudicating authority dropped proceedings related to clubbing the clearances of the two units. The Revenue challenged this decision, arguing for the clubbing of clearances based on mutual interests between the companies. However, the Tribunal held that the provisions for clubbing clearances did not apply in this case as the companies were distinct legal entities. The Show Cause Notice for clubbing clearances was deemed incorrect, leading to the dismissal of the Revenue's appeals.

Legal Precedents and Conclusion:
The learned Advocate for the companies presented various documents and legal arguments to refute the allegations of clandestine removal and suppression of production. The Tribunal emphasized the need for evidence beyond reasonable doubt to establish production and removal without duty payment. Citing relevant legal cases, the Tribunal concluded that the Revenue's case lacked strong evidence and could not be sustained. Consequently, the demands for duty and penalties on the companies were not upheld, and their appeals were allowed with consequential relief.