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TMI Blog2020 (1) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... l products alleged to be clandestinely cleared by the appellant is solely based on the production pattern of other assessee in the same Commissionerate - the learned Commissioner made a fundamental error in making such assumption to raise demand on the allegation of clandestine clearance. In the instant case, no shortages of goods were ever found which fact is on record and not in dispute. In any case, since the whole basis of allegation of clandestine removal is the production pattern of other assessees, which has no legal or scientific basis, the impugned duty demand cannot be sustained. Appeal allowed - decided in favor of appellant. - Excise Appeal No.766 of 2001 - FINAL ORDER NO. 75051/2020 - Dated:- 2-1-2020 - SHRI P.K.CHOUDHARY, MEMBER(JUDICIAL) AND SHRI BIJAY KUMAR, MEMBER(TECHNICAL) Shri B.Panda, Senior Advocate Shri B.K.Sahu, Advocate for the Appellant Shri S.Mukhopadhyay, Authorized Representative for the Respondent ORDER The instant appeal has been filed by the assessee, M/s. Sri Durga Cables (P) Ltd. against the Order-in-Original dated 27.09.2001 passed by the learned Commissioner, Central Excise, Bhubaneswar, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pancy was found in the book stock vis- -vis physical stock. He submitted that the department has applied the production pattern pertaining to NICCO India Ltd. to arrive at the conclusion that input - output ratio would be 1: 1. He submitted that the said ratio could not be applied in their case for the reason that they are a SSI unit and there may be difference in production process. He submitted that no corroborative evidences have been produced to show that there is a clandestine clearance, neither any statement of transporter or buyer has been obtained. Moreover, there is no evidence of procurement of unaccounted raw materials or excess usage of electricity or other factors of production to show that excess goods have been manufactured and removed without recording in the books of accounts. He relied on several judicial pronouncements including the following: Continental Cement Co. vs. UOI 2014 (309) ELT 411 (All) Premier Packaging vs. Collector 1986 SCC Online CEGAT 230 CCE vs. Brindavan Beverages (2007) 5 SCC 388 (SC) 5. On the contrary, the learned Authorized Representative for the Revenue reiterated the findings of the learned Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icity for producing one MT of steel ingots. It is the basic philosophy in the taxation matters that no tax can be levied on the basis of estimation. In this case, there is added problem. Estimation of production fluctuates widly depending upon the fact as to which report is adopted. Tax is on manufacture and it is to be proved beyond doubt that the goods have been actually manufactured, which are leviable to excise duty. Unfortunately, no positive evidence is coming on record to that effect. Article 265 of the Constitution of India says that no tax shall be levied or collected except by authority of law. Unless the manufacture of the steel ingots is proved to the hilt by authentic, reliable and credible evidence, duty cannot be demanded on the basis of hypothesis and theoretical calculations, without taking into consideration the ground realities of the functioning of the factories. High consumption of electricity by itself cannot be the ground to infer that the factories were engaged in suppression of production of steel ingots. The reasons for high consumption of electricity in the case of the appellants factories have not at all been studied and analysed by the Revenue indepen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of goods therein, security gate records, transporters documents, such as L.Rs, statements of lorry drivers, entries at different check posts, forms of the Commercial Tax Department and the receipt by the consignees; (v) Amount received from the consignees, statement of the consignees, receipts of sale proceeds by the consignor and its disposal. In the instant case, no such evidences to the above effect have been brought on record. 22.1 For want of evidence relating to the above points, clandestine removal cannot be sustained merely on the basis of the technical opinion report of Mr. Batra. In this connection, the following case laws are relied : (i) Emmtex Synthetics Ltd. v. Commissioner of Central Excise, New Delhi reported in 2003 (151) E.L.T. 170 (Tri.-Del.); (ii) Commr. of Central Excise, Chennai v. Dhanavilas (Madras) Snuff Co. reported in 2003 (153) E.L.T. 437 (Tri.-Chennai); (iii) Commissioner of Central Excise, Madurai v. Madras Suspensions Ltd. reported in 2003 (156) E.L.T. 807 (Tri.-Chennai); (iv) Commissioner of Central Excise, Coimbatore v. Sangamitra Cotton Mills (P) Ltd. reported in 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss-examination by the appellants, as was repeatedly requested by them. In the absence of the same, the statements of the share brokers etc. cannot be relied upon. Even if, for the sake of argument, it is accepted that the income shown in the balance sheets is not the income derived from the sources declared by the appellants, there is nothing on record to link it with the so called clandestine removal of the goods and that cannot be made the basis to establish a case of clandestine removal. In any case, the Commissioner has not determined the duty liability on the basis of the profit shown in the balance sheets. He has used this only as corroboration and not the primary basis for determining the quantum of production of steel ingots. Once the main evidence itself is found to be unreliable, such figures of profits etc. in the balance sheets cannot form a basis for rejecting the quantum of production appearing in the records of the appellants. ................. It may be emphasised that the instant case has been booked only on the basis of theoretical conclusions drawn on the basis of the technical opinion report of Shri N.K. Batra, Professor of I.I.T., Kanpu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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