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TMI Blog2009 (6) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued in three days. Finding of clandestine production and clearance in the instant case was made solely on the basis of a formula applied to the operation of the assessee’s production and feeding of raw material in a couple of days. No statement of any worker or any buyer had been obtained to support the charges. There is no evidence of sale to any buyer of the quantity found to have been clandestinely cleared. There is no evidence of receipt of any sale proceeds. In the circumstances, considering , the ratio of various decisions relied on by the appellants, the impugned demand towards clandestine clearance is held to be not sustainable. Appeal allowed - decided in favor of appellant. - E/896 and 895/2006-MAS - 702-703/2009 - Dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.493 M.Ts. of SSSG. On enquiries with Shri A. Selvakumar, authorized signatory of Unit I, he ascribed the shortage to poor quality of the raw material used and (inefficient) processing parameters applied. A quantity of 10 M.Ts. of Soda Ash found in the premises was seized on the reasonable belief that the same would be used for production of finished goods, which would eventually be cleared without payment of duty. The officers also recovered two invoices bearing the same number and date (No. 797, dated 6-6-04) raised by the Unit I for supplying a quantity of 3.51 M.Ts to two different parties. Adjudicating the allegations of clandestine production and clearance of SSSG, the original authority demanded an amount of Rs. 62,647/- under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esence of two invoices with same number and date in the name of two different parties, the appellants had submitted that the invoice in question No. 797, dated 6-6-04 covering a quantity of 3051.5 M.Ts had been raised for supplying the finished goods to M/s. Sunshine Soap Allied Products. Another invoice with the same number and date came to be generated in the name of M/s. Mahalakshmi Detergents owing to power failure and computer error. The appellants had intimated this position on the date of visit of the officers and the officers chose not to investigate the matter further with M/s. Mahalakshmi Detergents located in the same town. As regards the excess 10 M.Ts of Soda Ash the appellant reiterates the arguments before the lower authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erates the finding contained in the impugned order. 5. I have carefully considered the facts of the case and the rival submissions. I find that the charge of clandestine clearance in the case relating to the Unit I is found solely on the basis of the assessee s input output norms. This calculation is subject to various limitations such as quality of the raw material used and other process parameters. Moreover, the production norm, as claimed by the appellants, is determined after watching the performance of the production machinery over a period of time. This ratio cannot be reliably applied to determine the output of a given quantity of raw material issued in three days. In Oudh Sugar Mills Ltd. case (supra), the Apex Court found that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant case was made solely on the basis of a formula applied to the operation of the assessee s production and feeding of raw material in a couple of days. No statement of any worker or any buyer had been obtained to support the charges. There is no evidence of sale to any buyer of the quantity found to have been clandestinely cleared. There is no evidence of receipt of any sale proceeds. In the circumstances, considering , the ratio of various decisions relied on by the appellants, the impugned demand towards clandestine clearance is held to be not sustainable. Therefore, the demand of duty of Rs. 62,647/- is vacated. Equal amounts of penalty imposed on Unit I under Section 11AC and the demand of interest under Section 11AB are also vacated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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