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of <h1>Appeal success in duty recovery case due to lack of concrete evidence</h1> <h3>Jai Bharat Steel Rolling Mills Versus Commissioner of Central Excise & Customs, Nashik</h3> Jai Bharat Steel Rolling Mills Versus Commissioner of Central Excise & Customs, Nashik - TMI Issues:1. Recovery of duty liability on unrecorded production.2. Alleged evasion of duty on clandestine clearances.3. Refutation of evidence and allegations by the appellant.4. Justification of deviation from the norm in production.5. Onus placed on the assessee to prove deviation.6. Culpability of the assessee in suppressing production.7. Controversy regarding clandestine clearances in the steel sector.8. Lack of legal sanction for determination of clandestine removal.9. Duty liability on shortage of stock.10. Recovery of duties based on estimates.Analysis:1. The judgment pertains to an appeal against an order for the recovery of duty liability on unrecorded production by a steel rolling mills company. The duty liability was alleged to be evaded on clandestinely cleared goods between specific periods, disentitling the company from concessional rates. The assessment was based on supervised operations and circumstantial evidence, leading to the imposition of penalties and interest under relevant sections of the Central Excise Act, 1944.2. The appellant contested the allegations of evasion, citing lack of concrete evidence and reliance on circumstantial factors. The adjudicating authority found the partner's statements to confirm the evasion. The appellant questioned the absence of direct evidence and relied on legal precedents regarding the burden of proof in such cases.3. The appellant argued against the mathematical equation derived from supervised production, highlighting the limitations and variables affecting actual production. The appellant criticized the extrapolation of electricity consumption as the sole basis for determining production, emphasizing the need for considering all operational factors.4. The judgment addresses the justification for deviation from the norm in production and the onus placed on the assessee to prove such deviations. The appellant raised concerns about peripheral inferences and market realities not considered in the assessment of alleged evasion.5. The authorized representative supported the original authority's findings, emphasizing the culpability of the assessee in suppressing production for illicit clearance. The representative cited recorded statements as evidence supporting the evasion allegations.6. The issue of clandestine clearances in the steel sector was discussed, referencing previous tribunal decisions highlighting the insufficiency of relying solely on electricity consumption for duty recovery. Legal precedents emphasized the necessity of concrete evidence to prove allegations of clandestine removal.7. The judgment concluded that the lack of legal sanction for determining clandestine removal solely from energy consumption data invalidated the duty recovery. The recovery of duty liability based on unexplained energy consumption was deemed unacceptable, and the denial of SSI exemption was without legal basis.8. Regarding the duty liability on stock shortages, the judgment referenced tribunal decisions stating that estimates without proper weighment are insufficient for duty recovery. The demand based on estimated shortages was deemed invalid.9. Ultimately, the impugned order was set aside, and the appeal was allowed based on the lack of legal sanction for determining clandestine removal and the insufficiency of evidence supporting duty recovery based on estimates and circumstantial factors.
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