2009 (3) TMI 741

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....ion of aluminium turnings/grains from aluminium scrap. A.G. Company is a partnership firm comprising Shri N. Manikandan, son of Shri T.P. Natarjan and others as partners. Following a visit to the premises of SGRM and A.G. Company, statements were recorded from various persons including S/Shri T.P. Natarajan, N. Manikandan and, Jeyakumar, partner of M/s. Jegada Industries engaged in production of fire works using aluminium grains. Adjudicating a Show Cause Notice issued to SGRM, A.G. Company and various others, the original authority found that SGRM had clandestinely manufactured and cleared excisable goods in excess of value of clearances exempted under SSI notification during the years 1995-96 to 1998-99. He found that part of the clearanc....

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.... from transport agencies, Octroi check posts, the factories concerned etc. This was not done. The Commissioner (Appeals) found that after deducting clearances covered by these dummy invoices, respondent SGRM remained within the exemption limit in the financial years during the material period. After perusing certificates issued by Chartered Engineer and the supplier of lathe machines installed in SGRM, the Commissioner (Appeals) found that even if the respondents had utilized full capacity of annual production, the value of clearances would be only around Rs. 28,80,000/-. Power consumption in case of full utilization of capacity would be around 7200 units per year. The respondents had established that in 95-96 the power consumption was only....

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....ssued with a Show Cause Notice before it was decided in adjudication to club its clearances with those of SGRM. Citing case law, it is argued that the Commissioner (Appeals) could not have validly sustained demand of Rs. 3,229/- from SGRM. Therefore, the demand and penalties are assailed by the respondents as not sustainable. 4. Heard both sides. 5. On a careful perusal of the case records and after considering the submissions by both sides, we find that the Commissioner (Appeals) correctly held that clandestine manufacture and clearances had to be established with proper evidence such as consumption of raw material, consumption of power, production capacity etc. In the instant case, SGRM established with reliable documents ....