2023 (12) TMI 1057 - AT - Central Excise

Clandestine removal - demand of differential duty based on difference in the quantity mentioned on the railway receipts and central excise invoices prepared by the Respondent - HELD THAT;- It is observed that there is no evidence brought on record by the department to allege that there has been excess production. There is no evidence available on record regarding excess receipt of corresponding raw materials or there has been excess electricity consumption or other similar variations to establish clandestine manufacture and removal of goods. Thus, it is observed that the demand raised by the department is based merely on assumptions only. It is observed that the department has not brought in any evidence on record to substantiate the allegation of clandestine clearance. Accordingly, the demand of duty calculated by the department only on the basis of the excess quantity mentioned in the railway receipts, is not sustainable. Thus, there are no infirmity in the OIO passed by the Ld. Commissioner. Accordingly the OIO dated 28.03.2013 passed by the Ld. Commissioner is upheld. The impugned order passed by the adjudicating authority upheld - appeal of Revenue dismissed.

Summary

Issues involved:
The issues involved in the judgment are related to the demand of Central Excise duty based on discrepancies between the quantity mentioned on railway receipts and central excise invoices prepared by the Respondent, alleging clandestine removal without proper evidence.

Summary:

Issue 1: Discrepancy in Quantity
The Respondent, engaged in the manufacture of Calcined Alumina, faced a demand for Central Excise duty due to discrepancies in quantity mentioned on railway receipts and central excise invoices. The department alleged clandestine removal without concrete evidence, leading to the demand for duty amounting to Rs. 9,16,94,272. The Ld. Commissioner dropped the demand, prompting the department to file an appeal.

Department's Submission:
The department argued that the Respondent accepted railway weighment for freight payment but paid excise duty based on their own weighment, without providing a clear explanation for the discrepancy.

Respondent's Submission:
The Respondent contended that the demand was based on assumptions, highlighting that excess weight on railway receipts was not accepted by them. They emphasized the accuracy of their weighbridge, certified by the Department of Legal Metrology, and refuted the allegations of clandestine removal without substantial evidence.

Judgment:
The Tribunal observed that the department's demand was solely based on assumptions, lacking evidence of excess production or consumption to support the allegation of clandestine removal. The adjudicating authority's findings, including the random nature of discrepancies and the accuracy of the Respondent's weighbridge within tolerance limits, were upheld. The lack of corroborative evidence and reliance on railway receipts alone were deemed insufficient to sustain the demand. Consequently, the appeal filed by the department was rejected, and the Respondent's cross objection was disposed of in favor of upholding the Ld. Commissioner's order dropping the demand.