2024 (2) TMI 956 - AT - Central Excise

Clandestine manufacture and removal - allegation proceeds on the assumption that the differential consumption between ER-4 and ER-6 Returns has resulted in manufacturer of 1,48,942 MT of consumable steel, which has not been accounted for by the Appellant - time limitation - HELD THAT - No corroborative evidence whatsoever has been produced by the Revenue to fortify the allegation. On going through the OIO, it is seen that the Adjudicating Authority has held Considering the practical difficulties, in estimating the actual stock and in view of the submissions made by the appellants, we find that the demand of duty made by the adjudicating authority cannot be sustained - there are no reason to interfere with such detailed findings. Accordingly, we dismiss the Appeal filed by the Revenue on merits. Time Limitation - HELD THAT - Coming to the issue of limitation raised by the Respondent, it is found that neither have they filed any appeal against the impugned OIO on this specific issue nor have they filed any Cross Objection against the Appeal filed by the Revenue on the issue of time bar. Therefore, this issue need no further discussion. The Revenue s Appeal is dismissed on merits.

Summary

Issues involved:
The issues involved in this case are related to the calculation of duty liability based on alleged discrepancies in the consumption of iron ore by a manufacturer of steel products, as well as the question of limitation in issuing the Show Cause Notice.

Calculation of Duty Liability:
The Respondent, a manufacturer of steel products with captive iron mines, was required to file monthly ER 6 Returns and an Annual ER-4 Report showing actual consumption of iron ore. The Department alleged that the consumption shown in the ER-4 Return was higher than in the monthly returns, leading to a demand of duty amounting to Rs. 82,68,81,301. The Adjudicating Authority dropped the demand, but the Revenue appealed. The Respondent argued that they accurately reflected consumption after audit, and the Department's assumptions of clandestine production lacked evidence. The Adjudicating Authority found no evidence to support the Department's contentions, citing previous cases on the burden of proof for clandestine removal. The Tribunal upheld the Authority's findings, dismissing the Revenue's Appeal on merits.

Limitation in Issuing Show Cause Notice:
The Respondent argued that the Show Cause Notice issued after more than three years from the CERA Audit in 2009 was time-barred. They contended that as a reputable Public Sector Undertaking, they had no incentive for evasion. The Tribunal noted that the Respondent did not appeal the OIO on limitation nor file Cross Objection, thus declining to address this issue separately. Ultimately, the Tribunal dismissed the Revenue's Appeal on merits, emphasizing the lack of sustainable evidence for the duty demand.