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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 ..... ial issue register was recovered. Further, the officers recovered Daily store report showing the use and stock position of various materials used in the production of excisable goods namely, B.P. Sets (Bottom Pouring Sets) of different sizes, silico manganese, Ferro Silicon, Aluminium etc., which are for exclusive use in Induction furnace. The panchnama was prepared by the officers in presence of Shri J.P.Agarwal. On the basis of verification of documents/records, the Department issued the show cause notice dated 01.11.2008 to the appellants. It was alleged that each B.P Sets is used for each heat, thus the number of B.P.sets used in a day reveals the number of heats materialized. A chart was compiled on the basis of such issue. The officers also recorded statement of Shri Kamal Kishore Ketki, who stated that the two induction furnaces are installed in factory having capacity of 6 MT each. The officers on the basis of log sheets of Induction furnace for 16.07.2005 and 17.07.2005, calculated the capacity of induction furnace as 7.9 MT. By multiplying the number of B.P.Sets used for the period 01.03.2005 with 7.9 MT, it was alleged that there has been suppression of 5435.934 MT of M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of heat materialised . From these figures, the production suppressed was of 380.980 MT. The adjudicating authority also relied upon other records to shows that the issue of B.P.Sets, Silico Magnese and Ferro Silicon tallies. 4. The Ld. Counsel for the Appellant submits that the demand is based upon assumption/ presumption. That the B.P.Sets is a refractory material and is consumable used for pouring of molten metal from induction furnace to Ingots casting machine. That the use of B.P.Sets cannot be the criteria of suppressed production and removal. That B.P Sets being refractory material, are prone to breakages during transportation, handling and during the use. They come into multiple pieces and even if there is slight defect in one piece or it breaks during fitting, the whole set becomes obsolete. That in the statement of Shri J.P.Agarwal, he has clearly stated that 1 to 4 B. P. Sets are used in each heat. Nowhere in his statement, he has accepted that one B. P. Sets is used in each heat. He further submits that the log sheet for 16.07.2005 and 17.07.2005 cannot be the criteria to allege that the capacity of furnace is 7.90 MT. That the said log sheet nowhere shows the capacit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He submits that no practical test was conducted to ascertain the capacity of Induction furnace or the use of B.P. Sets in production. That the B.P. Sets is consumable and not raw material. That there is no evidence of receipt of any excess major raw materials namely, sponge iron and Pig Iron. He referred to paragraph 4 in the show cause notice, wherein, during physical verification no discrepancy was found either in stock of raw material and finished goods, which clearly shows that the allegations are without any basis. That only on the basis of use of refractory material no demand can be made. That similarly the number of times the Ferro silicon and Silicon manganese were issued cannot be considered as the number of heats materialized in factory. That the Ferro Silicon and Silicon maganese have got very minor use and only with the use of these items, production cannot be done. Use of these materials depends upon the chemical properties and quality of raw material. He relies upon the judgment in the 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.). He also submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said papers as pertaining to their production. Be it as the case may be, we find that though the said documents were seized from the factory of the Appellant, but no efforts were undertaken to check the veracity of the said documents. None of the documents seized from the premises has been investigated to know the author/ person who had prepared such documents. The Ld. Counsel for the Appellant has pointed out that even Shri Ketki in his statement had stated that the capacity of the furnace is 6 MT. In that case, the log sheet appears to be contrary to his statement 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TD 2004 (163) ELT 472 (Tri-Chennai) are on the ground that in absence of any evidence of clandestine removal, demand cannot be made merely on the basis of private records and registers. We agree with the submissions and judgments cited by the Appellant and hold that the demand on the basis of log sheet or use of B.P. Sets or Ferro Maganeese and Silicomn Magnese are not sustainable. Our view is also based upon the fact appearing in Para 4 of the show cause notice that at the time of visit to the factory of the Appellant, no discrepancy in stock of raw material and finished goods was found which could indicate any clandestine removal of goods. 7.2 The revenue has relied upon the consumption of electricity in the Appellant's unit. It is alleged that the consumption in Appellant's factory is 911 Units per MT, whereas the Industry average is 850 MT. We accept the contention of Appellant that no practical test was conducted to ascertain the actual consumption coupled with fact that the consumption of electricity is not the criteria to allege clandestine removal. Moreover, it is not knows as to from where the consumption of 911 units and industry average of 850 MT has been derive ..... X X X X Extracts X X X X X X X X Extracts X X X X
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