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TMI Blog2017 (5) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... Ingot manufactured and cleared allegedly clandestinely for the extended period 2004-05 to 2007-08. Further, penalty of Rs. 5,17,653/- under Section 11AC of the Act read with Rule 25(a)(b) & (d) of the Rules, penalty of Rs. 1,48,320/- under Rule 15 of CCR read with Rule 25 of CER for not maintaining proper account of input-Sponge Iron found in excess in the factory premises and penalty of Rs. 3,75,20,305/- imposed under Rule 25 of CER, 2002 read with Section 11AC of the Act. 2. The brief facts as per the show cause notice are that, there was an inspection in the factory premises on 15/ 16th February, 2008. During inspection the stock of input and finished goods was conducted by the officers in presence and with the help of the representatives of the factory and two independent witnesses. The verification of stock revealed some shortages and excesses in stock of finished goods and input respectively. A show cause notice for recovery of Excise duty in respect of shortage in stock detected and for confiscation of seized goods was issued on 07/08/2008. The details of shortage/excess is as follows: - S. No. Item Stock Physically verified Qty. as per RG-I Difference Ass. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be accepted by the factory management. Further, statement of one Israr Ahmad, Authorized Signatory of M/s. Ashirwad Steel & Alloys was recorded under Section 14 on 13th March, 2008 who was shown the invoices Nos. 040100074 to 040100076 dated 13th February, 2008 issued by the appellant in their favour. On having seen the invoices Ishrar Ahmad of Ashirwad Steels stated that no material against these invoices has ever been received in their factory and no payment has been made by their factory to Daya Sugar against these invoices. Further, in his statement Mr. Ishrar Ahmad stated that order for supply of Ingots were placed by their factory to M/s. Daya Sugar only during January, 2008 and no repeat order for supply of Ingots were given by them to Daya Sugar. It was further noticed that the two furnaces of the appellant being induction furnaces were supplied by Inducto Therm India Pvt. Ltd, Ahmedabad and as per the Challan No. 95 dated 12/04/2002 the description of the two furnaces had been mentioned-5000KG duraline furnace with hydraulic tilting arrangements, water cooled leads and set of bus bars. Thus, it appeared that each of the two furnaces has capacity of 5000KG tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant-assessee is before this Tribunal. 6. The learned counsel for the appellant have taken us through the copy of report given by Shri R Venugopal which states as follows: - "Report According to the dimension of the furnace provided in the letter and assuming that the width of the furnace is diameter of the crucible and height of the furnace is inner depth of the crucible, the capacity of the furnace will be 5.87 metric tons/heat This capacity has been calculated after assuminq only 80% volume utilization of the crucible by metal However, for actual determination of capacity, the following aspects must be taken into consideration. I. Coil height II. Spout height III. Curved area at the bottom of the crucible IV. Chemical analysis of sponge iron used for melting V. Proportion of MS scrap and sponge iron used for melting VI. Amount of flux (other additives) used for slag making" He further draws our attention to the forwarding letter of the Revenue dated 1st May, 2008 wherein Mr. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel further states that they had given adequate information to the Revenue as is evident from their letter addressed to Superintendent dated 19th February, 2008 as acknowledged by the Revenue dated 20th February, 2008 wherein the said facts have been duly verified and found to be true by the Revenue. As regards the stock of sugar on the date of inspection as recorded in RG-I register was 210055 quintals whereas as per the report of Revenue stock was found at 205011 quintals. It was stated that the factory was running and production and clearances were also going on. The said stock at 210055 quintals was finally cleared on 26/03/2009 on payment of appropriate duty. The appellant also furnish documentary support in respect of the same. So far the stock was taken, the same was taken by way of test check as only few stacks were counted and not all sugar bags stored in the godowns could be counted, which resulted in the so-called shortage. Further, stock of brown sugar 2900 quintals was not taken into account resulting into erroneous calculation. So far stock of molasses is concerned, the same was taken by dip method. Whatever stock of molasses was found on the date of inspe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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