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TMI Blog2019 (4) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the basis of a Technical Report of study carried out by a Prefessor of IIT, Kanpur, but the CESTAT while examining the appeal against such demand, observed that the allegation of clandestine clearance cannot be sustained only on the basis of such Technical Report. The demand for duty as well as proposal for recovery of cenvat credit cannot be sustained and the impugned orders upholding such view are set aside - appeal allowed - decided in favor of appellant. - Appeal Nos. Ex./649/12,70503/13,75059,75213/15, 77018/17 & CO/77670/18 - ORDER NO. FO/A/77172-77176/2018 - Dated:- 20-12-2018 - SHRI P.K.CHOUDHARY, MEMBER (JUDICIAL) AND SHRI V. PADMANABHAN, MEMBER (TECHNICAL) Shri Bipin Kumar, C.A. Shri Manob Borth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctually accounted in the Books and what would have arisen on the basis of calculation adopting the above norms, would have been cleared clandestinely without payment of duty and without accounting in the Books. Consequently, showcause notice was issued initially for the period March, 2009 to January, 2011 alleging suppression of production. In addition, the quantity of Methanol accounted was considered and by back calculation, the quantity of inputs used was worked out. It was alleged that the quantity of inputs over and above the theoretically calculated quantity required for the manufacture of accounted quantity of Methanol, was never utilized by the assessee. Hence, the cenvat credits for this portion of inputs were proposed to be revers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r use in the factory ; (b) A portion of Natural Gas is also used in the Proforma Section of the cracker plant for manufacture of Methanol. (ii) It was also pointed out that the total quantity of Natural Gas used will also depend upon the actual calorific value of gas, which may vary from time to time. (iii) In view of varying factors outlined above, the quantity of gas consumed in the factory is often much more than the norms adopted by the Revenue as 970 Standard Cubic Meter (SCUM) for manufacture of 1000 MT of Methanol. Taking into account the various other uses in addition to use as feed stock, the total consumption is of the order of 1190 Standard Cubic Meter (SCUM). (iv) The norms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms declared and accepted by the assessee may be upheld. 6. We have heard both sides and perused the appeal records. 7. The assessee has received Natural Gas through pipelines as input for use in the factory. The Natural Gas has been used as Feed Stock in the manufacture of Methanol. The Departmental Officers, during the course of Audit, concluded that the quantity of 970 Standard Cubic Meter of Natural Gas, will be required for manufacture of 1000 MT of Methanol. This norm appears to have been accepted by the assessee also. Projection of the quantity of Methanol, which would have been manufactured by making use of Natural Gas on the basis of the above norms, was done by the Revenue and difference between the qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allegation of clandestine clearance has to be supported by tangible evidence of clearance of the alleged additional quantity. Such allegation cannot be made simply on the basis of arithmetical projection based on a mathematical formula. This view finds support in the case of R.A. Castings Pvt. Ltd. (supra). In this case, the total quantum of steel ingots manufactured by the assessee was projected on the basis of a Technical Report of study carried out by a Prefessor of IIT, Kanpur, but the CESTAT while examining the appeal against such demand, observed that the allegation of clandestine clearance cannot be sustained only on the basis of such Technical Report. 11. The above Tribunal s decision was affirmed by the Hon ble Allaha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the appellants factories have not at all been studied and analysed by the Revenue independently. Instead, the norm of 1046 units fixed as per Dr. Batra s report has been blindly applied to the appellants cases to work out the excess production. This approach is flawed and does not have sanctity. 21 .. 22. The clandestine manufacture and removal of excisable goods is to be proved by tangible, direct, affirmative and incontrovertible evidences relating to : (i) Receipt of raw material inside the factory premises, and non-accountal thereof in the statutory records; (ii) Utilization of such raw material for clandestine manufacture of finished goods; ..... X X X X Extracts X X X X X X X X Extracts X X X X
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