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TMI Blog2014 (4) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... possible to manufacture their final product with just Armature Assemblies. Demand cannot be made on the basis of the entries made by the staff in the rough registers maintained by them without their being any corroborative evidences. Further, in the absence of any allegations as regards receipt of other raw-materials, demand cannot be confirmed on the basis of one of the inputs shown to have been received. Further, the quantum of final product calculated mathematically on the basis of receipt of one of the raw-materials and on input-output ratio cannot be held to be just and fair. By applying the above ratio of law declared by various courts in umpteen number of cases, it has to be held that the Department has not been able to establish its allegations and charges made against the appellants, especially, when the appellants have accounted for and have given explanation for each and every Armature Assembly/shaft - Decided in favour of assessee. - Appeal Nos. E/972-974/2007 -EX[SM] - Final Order Nos. 50807-50809/2014 - Dated:- 28-2-2014 - Mrs. Archana Wadhwa, J. For the Appellant : Shri KK Anand, Advocate For the Respondent : Shri BB Sharma, DR JUDGEMENT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said discrepancy and accordingly the goods were seized. Scrutiny of the production slip books seized by the officers revealed that a chart of daily production was being prepared on the basis of the said production slips. On comparison of the production as reflected in the production slips with the RG-I register, Revenue entertained a view that the production recorded in RG-I register was less than the actual production shown in the production slips. Stock inward registers for the years 200-01 to 2003-04 were also scrutinised, which revealed that the appellants had received and issued total number of Armature Assembly shafts, which should have resulted in more production of starter motors. From the said fact, Revenue entertained a view that the appellants were suppressing the production of their final products. 4. On the above basis, proceedings were initiated against the appellants by way of issuance of Show Cause Notice alleging clandestine manufacture and clearance of DC starter motors. The appellants, during the course of adjudication, submitted that they were not maintaining any records of Armature Assembly in as much as the same was not their final product and was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otors in their RG-I register only to the extent of 1,76,001. As such, it is their case that the balance quantity of Armature Assembly issued, stands used in the manufacture of starter motors, which were cleared without payment of duty. It is seen that when the appellants protested to the said demand by submitting that the ratio of 1:1 adopted by the Revenue is against the settled principles; that there are invariably wastage occur during the course of manufacture of any final product and Armature Assembly/shaft issued for manufacture is sometimes received back due to lying/process rejection, the adjudicating authority observed that- the parties claim appeared to be genuine as the quantity of starter motors manufactured shall depend on the quantity of Armature Assembly/shaft used in production instead of those issued for production as alleged in the Notice . Accordingly, he got records re-checked by the investigating officer and found that 960 numbers of Armature shaft were received back either from the production or from the line production or for re-inspection, etc. However, he did not extend the benefit by holding back the said 960 pieces which have been received back from p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) Armature Assembly seized by Excise Officers on 25.09.2003 360 (j) Balance unused 2,293 As is seen from the above chart, the appellants have explained the factum of consumption of Armature Assembly during the entire period. The adjudicating authority has also accepted the fact that there is online rejection of Armature Assembly. I further find that the statements of the representatives of the appellants are exculpatory and no deponent has accepted the factum of the clandestine removal. The said explanation given by the appellants showing accountal of Armature Assembly did not stand rebutted by the Revenue by producing any evidence to the contrary to show that such Armature Assemblies were used in the production of starter motors. 9. Apart from the said entry showing issuance of Armature Assembly in work-in-progress register, which is admittedly not a statutory register, the Revenue has neither alleged nor produced any other evidence in respect of other raw-materials which are also required for production of starter motors. It is not the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of clandestine manufacture and removal. The Tribunal in the case of Parle Beverages Ltd. Vs. CCE, Mumbai-I [1999 (114) ELT 872 (Tribunal)] observed that the clandestine removal charges cannot be made on the basis of the theoretical formulas. Appeal filed by the Revenue on the said order was dismissed by the Hon'ble Supreme Court of India reported as 2002 (148) ELT A84 (SC). To the similar effect is on the decisions of the Tribunal in the case of Abba Rubbers Vs. CCE, Cochin [2006 (193) ElT 471 (Tri.-Bang.)] and in the case of Mohan Steels Ltd. Vs. CCE, Kanpur [2004 (177) ELT 668 (Tri.-Del.)]. The list is unending and suffice it to refer to the above decisions. The ratio of law declared in all such decisions is that demand cannot be made on the basis of the entries made by the staff in the rough registers maintained by them without their being any corroborative evidences. Further, in the absence of any allegations as regards receipt of other raw-materials, demand cannot be confirmed on the basis of one of the inputs shown to have been received. Further, the quantum of final product calculated mathematically on the basis of receipt of one of the raw-materials and on input-out ..... 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