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TMI Blog2017 (4) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... or anyone else of the respondent has ever been questioned about such details found in the private records. Under these circumstances, the 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. The department has not carried out investigation into many aspects. The evidences presented by the department, at best, can be considered as a reason 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 prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nished goods without accounting. On conclusion of investigation, show cause notice dated 23.09.2010 was issued proposing:- (a) Demand of Central Excise duty under proviso to Section 11A(1) of the Central Excise Act, amounting to ₹ 32,98,632/- for clandestine removal of MS Ingots of 1343.47 MT which were produced out of 1148.265 MT of unaccounted Sponge Iron. (b) Demand of Central Excise duty amounting to ₹ 9,31,226/- under proviso to Section 11A(1) of the Central Excise Act on 379.265 MT of MS Ingots which were removed clandestinely without payment of duty. (c) Demand of Cenvat credit of ₹ 27,800/- under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Act. (d) To confirm interest on the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director. Consequently, the demand has been made only on the basis of respondent s documents which clearly support the allegation made against the respondent. Since these evidences are tangible and clinching, the Commissioner (Appeals) has erred in setting aside the Order-in-Original. Revenue has also cited several case laws to support their ground and particularly they have relied upon the decision of the Tribunal in the case of Gulabchand Silk vs. CCE, Hyderabad 2005 (184) ELT 1263 (Tri. Bang.). 4. The respondent has filed Cross-objection against the Revenue s appeal in which they have supported the impugned order. In particular, they have urged the following points:- (a) The computer print-out relied upon for framing the cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch of the respondent s factory premises on 04.03.2006, investigations concluded that respondent has received a total of 1148.265 MT of Sponge Iron, which has not been shown in the records. By referring to the accounted production figures of the respondent during the period November 2004 to February 2005, the Revenue estimated that on an average of 1.00 MT of Sponge Iron has been consumed by respondent for manufacture of 1.17MT of MS Ingots. By using above thumb Rule, Revenue has estimated that receipt of 1148.265MT of Sponge Iron would have been used by the respondent to manufacture 1343.470MT of MS Ingots. The total value of this quantity of ingots has been worked out by taking the rate of ₹ 15,045.00 per MT. Accordingly, the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of money from the respondents to suppliers of raw materials and also from buyers to respondent in the case of sale of goods. (c) Nothing has been brought on record regarding transportation of raw materials as well as finished goods. (d) Other than the discrepancy in the stock of raw materials as well as finished goods at the time of search, the department has not brought on record any variation in the stock. The quantum of alleged suppressed production has been arrived at only on the basis of calculation and is not on actual basis. Hence, this cannot be taken as evidence of finished goods manufactured and cleared. (e) There is nothing on record regarding use of excess manpower, electricity consumption etc. Further, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of calculation of quantum of manufacture, without any actual evidence of such manufacture, cannot be sustained. 10. The respondent has relied upon several case laws. The decision of Hon'ble Allahabad High Court in the case of Continental Cement Company vs. UOI 2014 (309) ELT 411 (All.) has elucidated as follows:- 12 . Further, unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of suf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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