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TMI Blog2025 (3) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... olumn but has been consumed by them captively for re-cycling the same. Since the ER 4 Return does not have any specific column to show such captively consumed figures, they have shown the same in the Sales column. The entire demand has been confirmed based solely on the basis of audit objection, without giving due consideration to the documentary evidence placed by the appellant. Therefore, on this count itself, the confirmed demand is not sustainable. Time limitation - HELD THAT:- It is found that by way of Spot Memo dated 09/5/2015, the issue about the differential 946 MT was raised by the audit team for which the appellant has filed their reply on 19/6/2015. Therefore, the Department has come to know about the issue on 19/06/2015 itself. However, they have waited for next nearly two years to issue the Show Cause Notice by invoking the extended period, without showing as to what kind of investigation was taken up during the intervening period. Moreover, it is found that the difference in quantification of demand has been gathered from ER-1, ER-4 and ER-6 Returns which have been filed by the appellant. All these facts go on to show that the Department has not made out any case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ass a proper order. In the Denovo adjudication, the Adjudicating Authority has not given proper consideration to the explanation given by the appellant. He also did not give proper weightage to the Certificate issued by the Chartered Accountant and went on to confirm the demand. On appeal, the Commissioner (Appeals) dismissed the appeal filed by the appellant. Being aggrieved, the appellant is before the Tribunal. 3. The Learned Counsel appearing on behalf of the appellant submits that immediately after receipt of the Spot Memo, the appellant had clarified that there was a typographical error in ER 4 for the month of January 2025 wherein instead of typing 10 MT, they have typed 100 MT. Because of this, there arose difference of 90 MT between ER-4 and ER-1 figures. She further submits that part of the scrap generated during the manufacture is again re-cycled and the same is used for captive consumption. Such scrap generated was shown as sale under ER-4 under the sales column since there is no specific column to show the captive consumption details. As a matter of fact, the quantity of 753.9 MT is not on account of any sale but is on account of captive consumption. She submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no further investigation was taken up by the Department to quantify the demand. In such a case, the department was not required to wait for next more than two years to issue the Show Cause Notice on 08/06/2017. Since the Department had full knowledge about the issue by 19/06/2015, the Revenue cannot take the stand that any suppression has occurred on the part of the appellant. 7. In view of the above submissions, she prays that the confirmed demand may be set aside even on account of limitation. 8. The Learned AR appearing on behalf of the Revenue takes me through Para 2.2 of the Show Cause Notice to show that even in case of some raw materials they have found difference between the purchase and consumption details. He submits that only after proper verification of the Books of Account by the Audit, the difference between ER-1 and ER-4 figures could be arrived at. He further submits that the Chartered Accountant's Certificate is nothing but re-conciliation statement to justify the difference quantity detected by the audit department. Therefore, he justifies the confirmed demand. 9. Heard both sides and perused the appeal papers and the submissions made. 10. Admittedly, the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etric tonnes but the assessee as per the ER-1 returns during the period October 2009 to March 2014 has not reflected the production and clearance quantity as per their production capacity. It was alleged that the assessee has shown a substantial lesser quantity of production and clearance of the said goods than that of their installed capacity. After noting the relevant details, the assessee was called upon to clarify as to the deviation of the annual capacity of production and production reflected in their ER-1 returns. 4. The reason for issuing show-cause notice to the assessee was based on the quantity of production difference between the annual installed production capacity statement as declared in the ER-7 statement and the ER-1 return. The annual installed capacity of the assessee's unit is 60,000 metric tonnes which has been mentioned in the ER-7 statement. 5. The department alleged that the assessee suppressed their production by showing lesser production in the ER-1 return and removed the products clandestinely by intentionally evading the payment of Central Excise duty. 12. The Commissioner who adjudicated the show cause notices confirmed the demand by order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d taken by the assessee in their reply to the show cause notice, the documents which were annexed along with the show cause notice, unfortunately neither the adjudicating authority nor the tribunal adverted into any of these facts. The learned tribunal failed to see that the charge of clandestine removal is very serious charge and to establish the same there should be cogent and relevant materials. The learned tribunal has also not gone to into the aspect as to whether the extended period of limitation could have been invoked. Admittedly, the audit objection was based upon the information culled out from the return filed by the assessee and therefore there can be no charge of suppression or willful mis-statement and consequently the extended period of limitation could not have been invoked. The learned tribunal did not take enough effort to examine the facts of the case which are very crucial in the case on hand qua the allegations set out in the show cause notice. Thus, we are fully convinced that the adjudicating authority as well as the learned tribunal committed a serious error in not accepting the case of the assessee. We reiterate that the department has not been able to esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation is towards clandestine removal of 946 MT of Steel Ingots, the Revenue has not brought in any corroborative evidence whatsoever to fortify their allegation. No statements have been recorded from the purported buyers. No private records have been seized. No cash transactions details have been gathered. In case of allegation of clandestine removal, the Revenue is not only required to prove the manufacture of unaccounted goods, but they also have to bring in evidence to the effect that such goods have also been cleared clandestinely. Here the Revenue has not even made any attempt to do so. Therefore, I hold that the confirmed demand does not sustain on merits. I set aside the impugned order and allow the appeal on merits. 17. Now coming to the appellants stand on time bar, I find that by way of Spot Memo dated 09/5/2015, the issue about the differential 946 MT was raised by the audit team for which the appellant has filed their reply on 19/6/2015. Therefore, the Department has come to know about the issue on 19/06/2015 itself. However, they have waited for next nearly two years to issue the Show Cause Notice by invoking the extended period, without showing as to what kind of in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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