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TMI Blog2014 (12) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of Oudh Sugar Mills [1962 (3) TMI 75 - SUPREME COURT OF INDIA] wherein, Apex Court has held that allegation of duty evasion by clandestine removal based only on the calculation of the raw material fed into the process or on the working of the machinery as noticed during test inspection is not sustainable, when there is no tangible evidence in support of such an allegation. In view of this the impugned order confirming the modvat credit demand of 91,57,546/- against the appellant company alongwith interest thereon and imposing penalty of equal amount under Section 11AC is not sustainable and the same is set aside. - Decided in favor of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... d and on this basis it has been alleged that during the period of dispute i.e. period from 1-4-1995 to 24-11-1999, the appellant company has clandestinely cleared 782.436 MT aluminium wire rod involving cenvat credit of ₹ 91,57,546/- without reversing the credit. It is on this basis that the Commissioner vide Order-in-Original dated 31-5-2004 - (a) confirmed the modvat credit demand of ₹ 91,57,546/- on 782.436 MT aluminium wire rods alleged to have been removed clandestinely during the period from 1-4-1995 to 24-11-1999 along with interest thereon under Section 11AB and imposed penalty of equal amount on the appellant under section 11AC; (b) ordered confiscation of 4472 Kg. of aluminium wire rod valued at ₹ 3,81,462/- cleared to M/s. Dicco Conductors without reversal of the modvat credit with option to redeem on payment of redemption fine of ₹ 3.5 Lakhs and beside this imposed penalty of ₹ 2.00 Lakhs on the appellant company on this count, (c) confirmed central excise duty demand of ₹ 2,11,344/- on alleged clandestine removal of 22.015 aluminium scrap and modvat credit demand of ₹ 4,01,223/- in respect of alleged clandestine removal of 29.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption of aluminium wire rod is less than the consumption based on the maximum mass per K.M. for the financial year 1996-97, 1997-98, 1998-99 and 1999-2000, that only for the financial year 1995-96, the actual consumption of aluminium wire rod as per the appellant's record - 1395.828 M.T. is more than the maximum mass per K.M. based on the maximum diameter - 1370.583 M.T., that even for 1995-96, while the actual consumption of the aluminium wire rods excluding the scrap and the quantity of wire rod cleared as such is 1334.243 M.T. the maximum consumption based on maximum mass per K.M. can be 1349.942 MTs, that merely on the basis of the mass per K.M. for the standard wire of different diameter given in table 2 of the IS398:1994, the allegation of inflating the consumption of aluminium wire rods and the clandestine removal of modvat credit availed wire rods without payment of duty cannot be made, that in this regard the appellant rely upon the Apex Court's judgement in the case of Oudh Sugar Mills v. Union of India reported in 1978 (2) E.L.T. (J 172) (S.C.), wherein the Apex Court held that without any tangible evidence on record, the allegation of duty evasion by clandestine removal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared to M/s. Dicco Conductors on 29-11-1999 and the Commissioners order confirming the duty demand of ₹ 2,11,344/- in respect of clandestine removal of 22.015 M.T. of aluminium scrap and duty demand of ₹ 4,01,223/- on clandestine removal of 29.265 M.T. aluminium wire rod is not being contested, this portion of the impugned order is upheld. 7. The order which is disputed the part of the impugned order confirming modvat credit demand of ₹ 91,57,546/- along with interest thereon under Section 11AB on alleged removal of 782.436 M.T. of modvat credit availed aluminium wire rods during the period 1-4-1995 to 24-11-1999 and imposition of penalty of equal amount on the appellant. This modvat credit demand is based on the difference between the consumption of aluminium wire rods calculated by the departmental officers based on the approximate mass per K.M. of various types of aluminium alloys standard conductors given in the ISI standard and the consumption of aluminium wire rod as recorded by the appellant company in their central excise records. For estimating the actual consumption of the aluminium wire rods the departmental officers have calculated the weight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the raw material fed into the process or on the working of the machinery as noticed during test inspection is not sustainable, when there is no tangible evidence in support of such an allegation. In view of this the impugned order confirming the modvat credit demand of ₹ 91,57,546/- against the appellant company alongwith interest thereon and imposing penalty of equal amount under Section 11AC is not sustainable and the same is set aside. 8. As regards penalty of ₹ 20.00 Lakhs on Alok Sharma imposed under Rule 209A of the Central Excise Rules, 1944, since the modvat credit demand has been set aside, there would be no justification for penalty. Moreover, penalty under Section 209A of the Central Excise Act, 1944 can be imposed only when there is evidence that Shri Alok Sharma as Managing Director was involved in an acquiring possession of transporting, removing, depositing, keeping, concealing, selling or purchasing or in any other manner dealing with the excisable goods which he knew and had reason to believe are liable for confiscation for which we do not find any evidence. In view of this, penalty of ₹ 20.00 Lakh is also set aside. 9. In view of t ..... 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