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TMI Blog2016 (9) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... f approximation and averaging production as 77.6% and one statement of Shri Agarwal, Director of the appellant company cannot be called a prudent conclusion of the production estimate. Therefore, we are of the considered view that the department has not discharged its burden of conclusively proving the case of suppressed production and clandestine clearance by the appellants. In this regard we seek support from Hon’ble Allahabad High Court’s decision in the case of Continental Cement Company Vs. Union of India [2014 (9) TMI 243 - ALLAHABAD HIGH COURT] and Supreme Court’s decision in the case of Oudh Sugar Mills Ltd. Vs. Union of India [1962 (3) TMI 75 - SUPREME COURT OF INDIA] and CESTAT’s in the case of Punalur Paper Mills Ltd. Vs. CCE [2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n deposited by the assessee-appellant and was appropriated to the Government account by the impugned order. A penalty of ₹ 40 lakhs has also been imposed on Shri Ramesh Kumar Agarwal, Director of the appellant company under Rule 26 of the Central Excise Rules, 2002. 3. The respondent is Commissioner, Central Excise, Jaipur-I. The case of the Revenue is that as the appellant No. 1 is a manufacturer of Zinc Oxide, who during different periods depending upon the form of raw material have had different yields of the product viz. Zince Oxide, but the yield has to be in the range of 70% to 84%, which comes to an average of 77.60%. The statement of Shri Ramesh Kumar Agarwal, Director of the appellant company was recorded. The Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m batch to batch, and there is no standard input with standard predetermined quantity of zinc. In the statement itself which is relied upon, extracted at page 35 (of Paper Book) it has clearly come out that from zinc dross the output would be 70 to 80% and from scrap 50 to 70% for the recovery of zinc oxide. A perusal of pages 49/50 (of appeal) shows that the input basket will have materials like iron, aluminium, lead and so on. Even assuming for a minute all the inputs had 70% of zinc, one cannot fix the output based on the ratio of output of zinc oxide from pure ingot of 99.95% purity. The impurities in the inputs themselves take away the zinc metal and hence the yield of zinc oxide goes down. (iii) If indeed a quantity of 1545 me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n production considering average yield of the product viz. zinc oxide out of the raw material issued, which has been in the nature of different varieties like zinc dross, zinc ingots etc. and which are of different purities. During the hearing, ld. Advocate for the appellants further referred to literature Zinc - The Science and Technology of the Metal, Its Alloys and Compounds authored by CH Methewson, Professor, Yale University, prepared with cooperation of the American Zinc Institute; and the Scrap Specifications Circular issued by Institute of Scrap Recycling Industries, Inc. saying that the conclusions mentioned in the show cause notice and in the order in original confirming the suppressed production and duty is not correct, con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue side to come to a reasonable conclusion to say that there has been preponderance of probability of such suppressed production on the part of the appellant. The evidences in the form of approximation and averaging production as 77.6% and one statement of Shri Agarwal, Director of the appellant company cannot be called a prudent conclusion of the production estimate 6.3 Consequently, we are of the considered view that the department has not discharged its burden of conclusively proving the case of suppressed production and clandestine clearance by the appellants. In this regard we seek support from Hon ble Allahabad High Court s decision in the case of Continental Cement Company Vs. Union of India - 2014 (309) ELT 411 (All.) an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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