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2022 (1) TMI 72 - HC - CustomsClandestine removal - Charge Chrome - reliable evidence or not - Whether the Tribunal was justified in holding that the ratio of 1 1.3 taken from charge chrome to charge chrome slag manufactured by the assessee was not established by the Department? - HELD THAT - The Court is inclined to concur with the CEGAT that the Department proceeded on surmises and conjectures to allege there was clandestine removal of Charge Chrome by the Respondent and that this was based merely on the ratio of production of Charge Chrome to Charge Chrome Slag for FACOR. It was not based on the actual figures pertaining to the Respondent s production of Charge Chrome and Charge Chrome Slag over a period of time. As rightly pointed out by the CEGAT, the quality of the ore and the type of machinery used are relevant since no two units might use the same type of ore or machinery. To simply extrapolate the production figures of one company to determine whether there has been a suppression of production figures by another may neither be a safe or a reliable method of determining what should be the acceptable ratio of production of Charge Chrome and Charge Chrome Slag. The CEGAT was justified in holding that the ratio 1 1.3 for production of Charge Chrome to Charge Chrome Slag manufactured by the Assessee was not established by the Customs Department - the Court answers the question framed in the affirmative - reference disposed off.
Issues:
Challenge to order of Customs, Excise & Gold (Control) Appellate Tribunal, East Regional Bench, Calcutta regarding reference of question of law to the High Court for decision. Analysis: The application filed by the Collector, Customs and Central Excise, Bhubaneswar stemmed from an order by the Customs, Excise & Gold (Control) Appellate Tribunal, East Regional Bench, Calcutta, which dismissed the Reference Application No.19 of 1992. The Customs Department sought to refer the question of law to the High Court for decision, leading to the current proceedings (para 1). The central question raised for adjudication concerned the justification of the Tribunal's decision regarding the ratio of production of Charge Chrome to Charge Chrome Slag by the Assessee. The Tribunal's ruling was based on the lack of evidence presented by the Department to establish the 1:1.3 ratio, as inferred from another company's production figures. This discrepancy formed the crux of the legal dispute (para 2). During the hearing, only the learned Senior Standing Counsel appeared for the Customs Department, while no representation was made on behalf of the Respondent-Assessee. The absence of the Respondent highlighted the unilateral nature of the legal proceedings (para 3). The factual background revealed discrepancies in the production quantities of Charge Chrome and Charge Chrome Slag at the Assessee's facility during a stock taking verification. The Department alleged suppression of production based on a ratio derived from another company's records, leading to duty implications. The subsequent adjudication and appeal process culminated in the current legal challenge before the High Court (para 4-5). The Customs, Excise & Gold (Control) Appellate Tribunal's decision emphasized the necessity of concrete evidence to support the Department's claims regarding production ratios. The Tribunal highlighted the importance of considering various factors like ore quality and machinery types in determining production figures, cautioning against extrapolating data from one company to another. This critical analysis formed the basis for the Tribunal's disagreement with the Department's allegations of clandestine removal of Charge Chrome (para 6-7). Ultimately, the High Court concurred with the Tribunal's findings, asserting that the Department's reliance on extrapolated ratios without substantial evidence was unjustified. The Court emphasized the significance of accurate production data specific to the Assessee, rejecting the Department's speculative approach. By affirming the Tribunal's decision, the High Court disposed of the reference application in favor of the Assessee (para 8).
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