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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 ..... utilize the surplus electricity available in his cogeneration plant during the sugar season are in appeal against the impugned Order-in-Original ordering confiscation of 75 MT of sponge iron valued at Rs. Nine lakhs involving duty of ₹ 1,48,320/- with option to redeem on payment of fine ₹ 2,25,000/-Further, demand of Excise duty ₹ 4,41,602/- involved on sugar found short and allegedly removed clandestinely. Further, demand of ₹ 37,403/- involved on molasses found short and allegedly removed clandestinely, further demand of ₹ 38,648/- on MS Ingot found short. Further, demand of ₹ 3,75,20,305/- involved on MS Ingot manufactured and cleared allegedly clandestinely for the extended period 2004-05 to 2007-08. Further, penalty of ₹ 5,17,653/- under Section 11AC of the Act read with Rule 25(a)(b) (d) of the Rules, penalty of ₹ 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 ₹ 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 040100078 dated 14/02/2008 was not accounted for removal of goods in the stock register merely stated in para-10 page No.5 of his statement dated 16th February that the said lapse may be due to oversight. So far the excess of Sponge Iron, raw material for MS Ingots was found being 75 MT in excess and further not accounted for in the accounts of the appellant and in response to queries Shri S.K. Srivastava stated that the entry in their records may have escaped due to rush of work. Further; Mr. Srivastava in his statement stated that he agrees to deposit the duty with respect to variation in the stock of sponge iron, molasses, MS Ingots etc. Further, during the visit it was seen that the appellant have two furnaces, each having two crucibles, installed in the factory for manufacture of MS Ingots and that the capacity of each of the furnace was three MT. The officers measured the dimension of one crucible of each of the two furnaces installed in the factory and recorded the measurements. It was further stated by Mr. Srivastava that presently they were taking yield of approximately 3 MT of Ingots from the furnace. It was further stated that whatever capacity ascertained as per th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t furnished to the Revenue. In the light of these facts it appeared that the appellant have suppressed the production of MS Ingots and further they have not recorded the actual production in the RG-I register maintained and have been showing production of three MT per heat whereas as per the Challan of the furnace manufacturer and the report of the expert Mr. Venugopal, it appeared that the appellant was suppressing 2.87 MT of production per heat. Further, the allegation of clandestine production as per the Revenue, supported by the facts of shortage of raw materials and finished goods as mentioned hereinabove and further recovery of original and duplicate copy of invoices issued in the name of M/s. Ashirwad Steel Alloys Pvt. Ltd. and accordingly Revenue calculated clandestine production for the extended period 2004-05 to 2007-08 of MS Ingots and accordingly demanded duty with proposal to levy penalty. 4. The SCN was adjudicated on contest and the learned Commissioner vide the impugned Order-in-Original was pleased to confirm the demand along with interest and further imposed penalties as stated hereinabove. 5. Being aggrieved the appellant-assessee is before this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as MS Ingots 5.035 MT and runner and riser 0.280. This was a combined output of the two furnaces. Thus, there was approx. production of three MT per furnace. Mr. D.K. Jain have also given the drawing of the furnace which states that there is a layer of ramming mass inside the furnace body which have resulted into a lower output. The learned counsel further states that the said report was filed before the learned Commissioner. The learned Commissioner failed to consider the same and have rejected summarily, resulting into miscarriage of Justice. He further states that no instance of any clandestine removal or any unaccounted finished products lying outside the factory have been found by Revenue. So far the three invoices in the name of M/s. Ashirwad Steel is concerned, it is explained that they had supplied the goods vide the said invoices but M/s. Ashirwad Steel found the product unsatisfactory and not acceptable due to low carbon content, they rejected the goods and such goods were received back in the factory and duly accounted for. The learned counsel further states that they had given adequate information to the Revenue as is evident from their letter addressed to Superintenden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no mention of the way or method adopted by the inspecting team for quantification of the stock, as present in the factory. Accordingly, he states that the whole show cause notice is based on assumptions and presumptions and prays for setting aside the order in original. He further states that under the facts and circumstances there being no case of suppression and/or clandestinely manufacture and removal, the extended period of limitation is not invocable. 7. The learned A.R. for Revenue relies on the impugned order. 8. Having considered the rival contentions, we find that so far the apparent differences worked out in the stock of sugar, molasses, MS Ingots and Sponge Iron is concerned, the same call for no adverse inference as the show cause notice is silent, as also the punchnama, as to how the stock was actually taken and/or counted. There is no calculation sheet available with the punchnama. Further, we find that the appellant have produced evidence before the Revenue that the recorded stock of sugar and molasses have been subsequently cleared on payment of appropriate Excise duty. So far the allegation of clandestine manufacture and removal of MS Ingots ..... X X X X Extracts X X X X X X X X Extracts X X X X
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