9911796707
TMI Blog2017 (4) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... d on Sponge Iron along with other inputs. The Central Excise officers visited the factory of the respondent on 03.03.2006, after intercepting one truck carrying Sponge Iron without accompanying invoices. The officers under took verification on 04.03.2006 at the factory premises during the which it was noticed that there was excess stock of MS Ingots to the tune of 116.487MT and shortage of stock of Sponge Iron and Pig Iron . From the factory premises, certain records were also withdrawn for further scrutiny. Data was also recovered from the computer of the respondent during search operation and the same was transferred in Pen Drive as part of Panchnama. The Revenue undertook investigation against the respondent and concluded that respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise duty demand. The main grounds raised by Revenue in their appeal are as follows:- (a) The Commissioner has failed to appreciate the fact that at the time of verification, the Central Excise officers had found significant shortage in respect of Sponge Iron as well as Pig Iron. They also had found excess quantity of final product i.e. MS Ingots. The discrepancies also stand admitted by Shri K.P. Patel, Director. (b) The Commissioner has not considered the fact that the demand is based on the records withdrawn by the Central Excise officers from the factory on 04.03.2006. The demand is also based on data retrieved from pen-drive which was copied from the computer data available in the factory of the respondents. Such data has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. Commissioner (Appeals) has set-aside the demands on the basis of findings that there is no evidence produced by Revenue regarding purchase of raw materials, transportation of raw materials, use of labour, electricity etc. and no evidence of flow back of funds. Accordingly, they have submitted that the demand of said duty cannot be upheld. They have also relied upon various case laws. 5. With the above back ground, we have heard Shri M.R. Sharma, ld. DR appearing for the Revenue and Shri K. Kurmy and Shri Ashok Anand, ld. Advocates for the assessee. 6. The appellant is engaged in the manufacture of MS Ingots by making use of Sponge Iron/ Pig Iron as raw materials. On the basis of various private records seized by Revenue at the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the records of the case, I find that the above findings of the Commissioner (Appeals) is based on the records of the case. In the impugned order, the Commissioner (Appeals) has taken the view that the demand raised against the respondent cannot be sustained on the evidences produced by Revenue as a result of investigation. He held that demand cannot be upheld merely on the basis of loose slips/ private records which have not been corroborated by any other record, private of statutory. Specifically, he has cited following reasons:- (a) Revenue has not procured any incriminating documents such as parallel invoices, challans etc. pertaining to alleged transactions. (b) The department has not investigated the flow back of money from the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand upheld on the basis only of such private records cannot be sustained. The allegation of unaccounted procurement of raw-material has not been corroborated by any other document recovered by Revenue during investigation. It is also noted that the case is inadequately presented inasmuch as no investigation appears to have been made in respect of the sellers of raw materials or buyers of finished goods, transportation of such goods or even flow of funds. The total quantum of alleged production, on which duty demand has been raised, has been arrived at only by calculations on the basis of thumb Rule that 1.00 MT of Sponge Iron can be used for production of 1.17MT of MS Ingots. Demand of duty only on the basis of calculation of quantum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason to doubt whether the respondent has indulged in clandestine clearances. However, in the absence of clinching evidence supporting the charge of alleged manufacture and clearance, it is to be held that Revenue has not succeeded in proving the allegation of clandestine manufacture and clearance.
11. The Commissioner (Appeals) in the impugned order has discussed a number of case laws which also support the above view. Considering the case in totality, I am convinced that there is no reason to interfere with the findings of the Commissioner (Appeals) order setting aside the demand of excise duty in the present case.
12. In view of the above, the appeal filed by Revenue is dismissed.
[Order pronounced in the open court on 30.03.2017] X X X X Extracts X X X X X X X X Extracts X X X X
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