9911796707
TMI Blog2018 (8) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... ue is on the basis of input output ratio, which cannot be appreciated. Appeal dismissed - decided against Revenue. - Appeal No. E/53049/2015-EX [ DB ] - Final Order No. 71714/2018 - Dated:- 18-7-2018 - Hon ble Mrs. Archana Wadhwa, Member ( Judicial ) And Hon ble Mr. Anil G. Shakkarwar, Member ( Technical ) Shri Pawan Kumar Singh ( Supdt. ) AR for Appellant Absent for Respondent ORDER Per: Archana Wadhwa Being aggrieved with the order passed by Commissioner of Central Excise, Meerut vide which he has dropped the demand of ₹ 78,98,568/- (Seventy Eight Lakhs Ninety Eight Thousands Five Hundred Sixty Eight) proposed to be confirmed in the show cause notice dated 05/05/2014, Revenue has filed the present appeal. 2. We have heard the learned A.R. Shri Pawan Kumar Singh appearing for Revenue. Nobody appeared for the respondent. 3. Having gone through the impugned order, we find that the respondents are engaged in the manufacture of MS Ingots. During the course of audit conducted in their factory and based upon the scrutiny of records the respondent was asked to declare their input output ratio which the respondent complied with. Statement of their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to some extent. xi. That, there are variety of reasons, which may lead to different consumption patterns. There may be some standard consumption norms for very high technology steel plants but in small furnaces like that belonging to the Noticee, they cannot follow any standard consumption pattern or purchase standard inputs. The Noticee cannot therefore generalize their consumption pattern. The consumption pattern adopted by the Noticee changes from heat to heat, day to day, month to month and period to period. xii. That, the consumption, besides the aforesaid factors, is also dependent upon economy of rates coupled with availability of raw material on credit purchase basis. The small furnaces like that of the Noticee cannot be choosers in the market and they just survive on the market conditions and cannot work on the generalized standard of consumption. xiii. That, the officers may calculate on month-to-month basis and they would find that the consumption patterns are ever changing. The Noticee survive upon survival instincts and street smartness alone. Otherwise, the Noticee cannot compete with big players in the market. xiv. That, it is therefore not corre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... variable iron content and variable impurities. Thus, per unit/per metric ton consumption of sponge iron can vary to a large extent, depending upon content of iron and percentage of impurities in the sponge iron. xxiii. Similarly, M.S. Scrap and H.M. Scrap have varying degree of iron content and corresponding degree of impurities like dust rut and the low degree of iron content in these scraps also results in to low yield of finished iron ingots. xxiv. That, if the Noticee get some sponge iron or scrap cheaper even if high in impurities on credit, they have to go for it and as a result, the recovery of output goes down. xxv. That, the standard input to output formula can only be adopted by big manufacturers who adopt standard procedures and bank upon standard suppliers and/or standard inputs. Whereas, the standard input to output norms cannot be applied to the small furnace like that of the Noticee because they cannot maintain any standard regarding inputs like sponge iron and M. S. /H.S. Scraps and it depends more upon availability of funds to purchase inputs and the availability of inputs on credit basis. Therefore, for small furnace like that of the Noticee, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged in the SCN. These figures were duly declared in the E. R. -5 [Input consumption Annually], E.R.-6 [Input consumption Monthly] and E.R.-1 Returns [monthly production of Ingots]. xxxiv. That, the department was thus informed of the consumption pattern and data as well as production per month and it silently acquiesced and never objected to the consumption and production norms. Now, it cannot invoke extended period of limitation because nothing ws suppressed or mis-declared and the department always had the knowledge. The department cannot now feign ignorance and invoke extended period of limitation and therefore the demand is time barred. xxxv. That, the duly audited and declared data for the year 2009-2010, as given hereunder, does not support the basis that has been taken in the SCN as evident from the following: Description of Raw Material Consumption during 2009-10 [MT] Production of Finished Goods MS Ingots [MT] Consumption of raw material per MT of Ingots Sponge Iron + Sponge NDP 23616.800 + 15.200 = 23632 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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