2016 (7) TMI 291 - AT - Central Excise

Clandestine removal of goods - manufacture of zine ingots - It is the allegation that the entries made in the log sheet pertain to the manufacturing took place by the appellant and the same has not been entered in the RG-1 register. The appellant has explained that after manufacturing the goods, the goods are being tested and test reports are placed on records which show that after obtaining the test reports, the appellant is making the entries in the RG-1 register as the goods are ready for clearance. Held that - The Revenue has not controverted this fact. In that circumstance, without any positive evidence to show that the appellants have cleared the goods without payment of duty, the allegation is merely on the basis of assumption and presumption. As no positive evidence has been brought by the revenue to support its allegation that the goods cleared clandestinely without payment of duty is not sustainable. - Demand and penalty set aside - Decided in favor of assessee.

Summary

Issues: Appeal against order passed by Commissioner of Central Excise regarding duty demand on zine alloy ingots.

Analysis:

1. Background: The appellants manufactured zine alloy ingots and were found to have discrepancies in their records during a visit by central Excise officers, leading to duty demands and a show cause notice.

2. Initial Tribunal Order: The matter was taken up by the Tribunal, which remanded it back to the adjudicating authority for reconsideration due to discrepancies in the demands raised against the appellant.

3. Remand Proceedings: The focus in the remand proceedings was on issues related to discrepancies in log book entries and outward gate register entries.

4. Log Book Entries: The appellant explained that goods were tested as per specifications before being entered in the RG-1 register for clearance, refuting allegations of clandestine removal without duty payment. Lack of concrete evidence from the Revenue rendered the demand of ?14,75,127 unsustainable based on log book entries.

5. Outward Gate Register Entries: The appellant demonstrated engagement in job work activities, supported by invoices and debit notes, countering claims of clandestine removal. The demand of ?3,90,845 based on outward gate register entries was deemed unsustainable due to lack of corroboration.

6. Penalty Imposition: As the demands were found to be unsustainable, no penalties were imposed on the appellants.

7. Final Decision: The impugned order was set aside, and the appeals were allowed with any consequential relief, if applicable, on 29/04/2016.