Tribunal overturns order in appeal over cement clearance without evidence.

The Tribunal set aside the impugned order in an appeal involving alleged clandestine clearance of cement using slag without proper documentation. The department failed to provide sufficient tangible evidence to prove the clandestine clearances, including details on excess production and raw material purchases. As a result, the appeals were allowed on 20.12.2017.

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Issues: Alleged clandestine clearance of cement using slag without proper documentation and evidence.

Analysis:
1. The case involved an appeal against the Order-in-Original regarding the alleged clandestine clearance of cement by using slag in addition to clinker without proper documentation. The department alleged that the appellants had not recorded the actual quantity of slag consumption and the full quantum of cement manufactured, demanding duty on the excess cement cleared clandestinely.

2. The main arguments presented by the appellant included the absence of a panchnama during the visit of departmental officers, lack of evidence regarding the movement of slag, denial of manufacturing cement using slag due to inadequate machinery, and retraction of statements by involved individuals. The appellant also questioned the feasibility of producing the alleged quantity of cement based on their production capacity and electricity consumption records.

3. The Revenue justified the impugned order based on the recovery of writing pads containing details of raw materials and cement production, which were confirmed by the Quality Controller and partners but later retracted. The presence of trucks loaded with slag in front of the factory was also highlighted as evidence.

4. The Tribunal analyzed the evidence, noting the absence of a panchnama confirming the presence of trucks and the retracted statements of involved individuals. The capacity of the factory to produce cement with the alleged composition was questioned, emphasizing the lack of discussion by the adjudicating authority on this aspect.

5. Referring to a previous judgment, the Tribunal emphasized the necessity of tangible evidence to establish clandestine clearances, including details on excess production, raw material purchases, dispatch particulars, sale proceeds realization, finished product receipts, and power consumption. The department failed to provide sufficient evidence to support the allegations.

6. Consequently, the Tribunal concluded that the department did not discharge the burden of proving clandestine clearances with tangible evidence. As a result, the impugned order was set aside, and the appeals were allowed on 20.12.2017.

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