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TMI Blog2015 (12) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... No. E/1756/10-Mum - - - Dated:- 27-10-2015 - Mr. M.V. Ravindran, Member (Judicial) For the Petitioner : Shri A.M. Chituri, Consultant Shri K.R. Rathi, Advocate For the Respondent : Shri S.V. Nair, Supdt. (AR) ORDER Per: M.V. Ravindran This appeal is filed against Order-in-Appeal No. SB/78/Th.I/10 dated 29/06/2010. 2. Filtering out unnecessary details, the relevant facts that arise for consideration, appellant is a manufacturer of MS Ingots and is registered with the department. On a visit made to the appellant s factory, officers noticed, shortage of MS scrap to the tune of 30.85 Metric Tonnes. A show cause notice was issued after recording statements of various persons, demanding of Central Excise duty of ₹ 93,736/-, interest thereof and also for imposition of penalties under provisions of rules 25 of the Central Excise rules 2002, alleging appellant has manufactured the ingots out of such short found raw materials and cleared without payment of appropriate duty. Appellant did not file any reply to the show cause notice nor appear for the personal hearing granted by the adjudicating authority. The adjudicating authority based upon the records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r clearly indicates that said weighment done by the officers of 1242 Metric Tunes of MS scrap, will be time consuming and the entire exercise is based on eye estimation. I also find that there is nothing on the record to show that weighment was done by the officers systematically. 6.2 Secondly, the show cause notice indicates that the demand of the duty is on the presumptive manufacturing of Ms ingots out of the shortage of MS scrap noticed by the officers during the course of panchnama on 17.03.2007, both the lower authorities have not recorded any evidence to come to such a conclusion that the appellant had manufactured such ingots and cleared the same clandestinely. 7. I find that the similar issue was decided by the majority order in the case of Aum Aluminium P. Ltd. (supra). I reproduce the relevant paragraphs of the order. 61. I find that in the peculiar facts of this case, for confirming the charges and for accepting the evidence adduced, a series of assumptions and presumptions are to be made, which is addressed hereunder : (i) The production capacity of the plant and machinery for manufacture of Aluminum Sections, though being old, is able to produce the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace oil which was allegedly purchased and unaccounted by the appellant was from IOCL/HPCL. It is common knowledge that IOCL/HPCL effects the delivery of the furnace oil on advance payment and such advance payment has to be made by demand draft. In the first round of litigation before Tribunal, the Tribunal has noted this point and directed the adjudicating authority to verify and call for the records of payments made for the furnace oil cleared in the name of appellant. In these de novo adjudication proceedings, I find that the adjudicating authority has not given effect to the direction given by the Tribunal. Suffice it to say that the said direction would have given some evidence to arrive at proper conclusion, I find that the adjudicating authority should have gone into details of the payments made for the purchases of furnace oil recorded in appellant s name and could have come to a conclusion as to who made the payments for the furnace oil which was cleared from IOCL/HPCL and remained unaccounted by the appellant. In the absence of any such information, despite clear direction from the Tribunal, I find it difficult to hold that the furnace oil was procured by the appellants an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that there is no inculpatory statement of any of the persons regarding the clandestine manufacturing of aluminum sections from job worker. In the absence of any evidence, this presumption is totally erroneous and cannot be held against the appellant. (iv) It is assumed by the adjudicating authority that the appellants activity of not recording the furnace oil and isolated purchases of aluminum scrap and not accounting the same in books of records, has resulted in manufacturing of aluminum sections, which were clandestinely removed. This is again an assumption without any evidence. It is the findings in the Order-in-Original by the adjudicating authority that for manufacturing of aluminum sections, the aluminum billets have to be manufactured. It is also on record that aluminum billets are manufactured by melting aluminum scrap in furnace, wherein the furnace oil is used for heating of furnace. In my considered view, the worst case against the appellant, if any, could be clandestine manufacturing of aluminum billets in the appellant s factory. The entire show cause notice along with its annexures do not propose the charge of clandestine manufacturing and clearance of al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant only way of account payee cheque, which were duly recorded in the books of account and there is no finding. Co-relating such payments made to the transporters to the clearances which were sought to be allegedly clandestinely affected by the appellant. I find that the Hon. Member (Judicial) was correct in relying upon the judgment of Raj Petroleum Products, Durga Trading Co. (supra), Brims Products (supra). Raj Sundeep Co. Gian Singh (supra), for the proposition that the transporters records are not relevant for the purpose of proving allegations of clandestine removal of the goods. It is also to be admitted that there is no presumption under Section 36A regarding truth and accuracy of third party records, in which cases, such transporters are not being jointly tried with the accused, which is a fact in this case. (vi) There is no further investigation as to whom the goods were clandestinely cleared and sold, despite the fact that there was seizure of finished goods from the premises of M/s. Vinviv and M/s. Allied Aluminum on the pretext that the same were clandestinely removed goods. The said goods were released on the ground that there was no evidence of identifyin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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