2006 (9) TMI 332 - AT - Central Excise

Appeal allowed based on valid guidelines, lack of evidence, and audit issues.

The appeal was allowed as the court found the Ministry of Steel guidelines supporting the 10% burning loss claim valid, and the lack of evidence to ... Demand Issues involved: Appeal against Commissioner (Appeals) order upholding original authority's de novo order regarding differential duty demand for burning loss in manufacturing rerollable products.Facts: Six show cause notices issued for duty demand from June 1985 to August 1990, totaling Rs. 3,88,718.71, based on audit objections.Issue: Appellant claims 10% burning loss in raw materials for rerollable products manufacturing, citing Ministry of Steel guidelines. Central Excise authorities challenge 10% loss as high, referring to CBEC circular allowing scrutiny for losses over 1%.Judgment: Ministry of Steel guidelines considered valid technical opinion, while CBEC circular mandates scrutiny for losses over 1%. Lack of evidence to disallow 10% burning loss claim, especially as demands were based on audit objections without investigation. Appellant's reduction of burning loss to 7-8% post-2001 noted.Decision: Appeal allowed, demand deemed unsustainable.