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TMI Blog2016 (9) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and if the department had any doubt, they should have conducted practical test of the heat. No actual practical test was conducted to ascertain the capacity of the furnace which was the easiest thing to do. Further, the purchase invoices clearly show that the capacity of furnace is 6 MT each. We therefore, find that there is no force in the allegation that the capacity of furnace is 7.9.MT. Even the capacity of the furnace cannot be a criteria to allege clandestine removal. The excess or unaccounted consumption of raw material together with its production, removal and transportation has to be shown to substantiate the charges of clandestine removal. We find that the allegation of suppressed production is based merely upon use of B.P. Sets considering that one B.P. Set is used for one heat and thus the number of B.P. Sets means the number of heat materialized. We are not inclined to accept this logic made by the revenue for the reason that the consumption of consumables cannot be a criteria to determine the production of goods. It would be more farfetched imagination to assume that only on the basis of use of consumables, which is a refractory material in multiple piece and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... electricity cannot be a ground to uphold allegation of clandestine removal. We therefore, hold that the said alleged consumption of electricity can not be the defensible ground to allege clandestine removal of goods. The revenue has also relied upon certain investment made in the Appellant's Unit in the year 2003 on the ground that the same pertains to amount of clandestine clearances made by the Appellant. We find from the appeal memo that such investments were properly explained and pertain to subscription of shares in Appellant's company. In such a case, there is no reason to link said amount with clandestine clearances. Even assuming to be so, we find that the investment pertains to the year 2003, whereas in the present case, the period involved is 2005. Thus, there is no reason to hold that the said investments support the allegation of the revenue. Therefore, the demand against M/s Balajee Structural, is not maintainable and the impugned order is set aside. Also as there is no sustainable demand, consequential penalties on Shri Jaiprakash Agarwal, Commercial Executive is also set aside. - Decided in favour of appellant with consequential relief - Excise Appeal No.E/2475/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued, the same was multiplied with the capacity of furnace i.e 7.90 MT and it was alleged that the Appellant's unit has suppressed 380 MT of production of M.S. Ingots. It was further alleged that the consumption for per ton M.S Ingots in Appellant's unit is 911 units, whereas the industrial average is 850 MT per Unit, which shows that the allegation made against the assessee are correct. It was also alleged that in the year 2003 certain dubious investments were made in Appellant's unit which shows that the amount of clandestine clearances has been brought back into Appellant's unit in form of investments. 3. The show cause notice was adjudicated vide Order-in-Original No. COMM/RPR/34/2009 dated 28.05.2009 (for short, the impugned order ), in confirming the proposals made therein. The impugned order has confirmed the demand on the following grounds:- (i) That B.P. Sets is used for each heat. The number of B.P.Sets issues/ used in a day reveals the number of product heats materialized during that day. So the daily reports showing quantity/ number of B.P Sets in different sizes issued reveals the number of product heat materialized and therefore specific size ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly shows that the capacity of Induction furnace is 6 MT each. That there is no identification of author of such log sheets. He places reliance upon the judgment of AMBIKA CHEMICALS Versus CCE, CHENNAI 2002 (148) E.L.T. 101 (Tri. - Chennai) as upheld in 2003 (153) E.L.T. A298 (S.C.), to justify his stand that demand cannot be made on the basis of Note books maintained by the employee as the same is not supported by evidence with regard to purchase of inputs, production, source of funds, sale and receipt of consideration. Similarly he relies upon judgment of Tribunal in case of CCE, CHANDIGARH Vs. ARSH CASTINGS (PVT.) LTD. 2006 (195) E.L.T. 302 (Tri. - Del.) as upheld in 2010 (252) E.L.T. 191 (H.P.) to state that if on physical verification, no discrepancy is found, the demand on basis of the register maintained by the employee though related to the dispatch of the goods, the allegation of goods having cleared without payment of duty cannot be leveled in absence of any tangible evidence. He submits that the charge of clandestine removal is required to be proved by production of affirmative, positive and tangible evidence. There is no evidence on record to show the excess procurement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umption of electricity depends upon the use of raw material, their quality and proportion of mix. He states that no demand can be made on electricity consumption as held in the case of CCE, MEERUT-I Versus R.A. CASTINGS PVT. LTD. 2011 (269) E.L.T. 337 (All.) as upheld in COMMISSIONER Vs. R.A. CASTINGS PVT. LTD. 2011 (269) E.L.T. A108 (S.C.) and PRAGATI STEELS PVT. LTD. Vs. CCE, KANPUR 2012 (286) E.L.T. 253 (Tri. - Del.). He explains that the investment made were for subscription of share capital of company which has not been denied by the adjudicating authority. That even these investments were made in the year 2003, which has been accepted in the show cause notice and the present case relates to the year 2005, it cannot be said that the amount towards alleged clandestine production and removal was received in the year 2003. He submits that this clearly shows that the allegation against the Appellant are without any basis and reasoning. He further submits that without accepting that the seized records depict production capacity, even if it is assumed so, in that case also no demand can be made against the Appellant as there are no evidence of any clandestine production, removal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... number of heat materialized. We are not inclined to accept this logic made by the revenue for the reason that the consumption of consumables cannot be a criteria to determine the production of goods. It would be more farfetched imagination to assume that only on the basis of use of consumables, which is a refractory material in multiple piece and prone to breakages/ defect, can be ground to allege clandestine production and clearance of goods. Further no practical test of its use has been carried out. In this case, reliance has been placed on use of Ferro Silicon and Silicon Maganese, we find that it is used in very small percentage and the use depends upon the composition of major raw materials, and therefore, the number of times it was issued for production cannot be considered as equal to number of times the heat were materialized. In case of M. VEERABADHRAN Vs. CCE EXCISE, CHENNAI-II 2005 (182) E.L.T. 389 (Tri. - Chennai) as upheld in COMMISSIONER Vs. M. VEERBADHRAN 2006 (197) E.L.T. A34 (S.C.)., the demand based on formula was set aside and we find that the judgment is applicable in the present case. Further, the most important aspect for alleging clandestine removal is that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (329) E.L.T. 213 (Tri. - Del.) cited by the Appellant, it has been held that the consumption of electricity cannot be a ground to uphold allegation of clandestine removal. We therefore, hold that the said alleged consumption of electricity cannot be the defensible ground to allege clandestine removal of goods. 7.3 The revenue has also relied upon certain investment made in the Appellant's Unit in the year 2003 on the ground that the same pertains to amount of clandestine clearances made by the Appellant. We find from the appeal memo that such investments were properly explained and pertain to subscription of shares in Appellant's company. In such a case, there is no reason to link said amount with clandestine clearances. Even assuming to be so, we find that the investment pertains to the year 2003, whereas in the present case, the period involved is 2005. Thus, there is no reason to hold that the said investments support the allegation of the revenue. 8. In view of above observations, we hold that the demand against M/s Balajee Structural, the appellant herein, is not maintainable and we set aside the impugned order dated 28.05.2009. 9. Since, we have held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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