Commissioner rejects appeal on duty & penalty imposition, finding no evidence of clandestine production.The appeal against the order of the Commissioner (Appeals) setting aside the demand of duty and penalty imposed by the original authority was rejected. The Commissioner found that the respondent was engaged in manufacturing non-alloy steel products under the compounded levy scheme and there was no evidence to support the claim of clandestine production of alloy steel products. The Commissioner held that the demand for recovery of duty based on one invoice for alloy steel could not be upheld, as there was no proof that the respondents were capable of rolling alloy steel products. Issues:
- Appeal against the order of the Commissioner (Appeals) setting aside the demand of duty and penalty imposed by the original authority.

Analysis:
The case involved an appeal against the order of the Commissioner (Appeals) setting aside the demand of duty of Rs. 30,645/- and a penalty of equal amount imposed by the original authority. The respondent was engaged in manufacturing and clearing non-alloy steel products under the compounded levy scheme. The original authority alleged that based on some invoices showing the purchase of alloy steel ingots, the respondent must have clandestinely produced and cleared alloy steel products. However, the Commissioner (Appeals) found that the appellants were working under the Compounded Levy Scheme for manufacturing re-rolled products from non-alloy steel. The Commissioner observed that there was no evidence to support the claim that the respondents were capable of rolling alloy steel products. The Commissioner held that the demand for recovery of duty under Section 3 of the Act for one consignment of alloy steel could not be upheld based solely on one invoice.

The Commissioner found no material to contradict the fact that the respondents were not capable of rolling alloy steel products. Consequently, the appeal by the Department was deemed liable for rejection. The Commissioner upheld the decision of the Commissioner (Appeals) and rejected the appeal against the demand of duty and penalty imposed by the original authority. - COMMR. OF C. EX., LUDHIANA Versus MAHALAXMI MILLS
Central Excise
2009 (7) TMI 1063 - CESTAT NEW DELHI - 2009 (248) E.L.T. 797 (Tri. - Del.)
CESTAT NEW DELHI - AT
Dated:- 29-7-2009
E/605/2007-SM(BR) - 1050/2009-SM(BR)(PB)
Central Excise
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Shri M. Veeraiyan, J. Shri S.N. Srivastava, SDR, for the Appellant. None, for the Respondent. ORDER This is an appeal against the order of the Commissioner (Appeals) No. dated setting aside the demand of duty of Rs. 30,645/- and a penalty of equal amount imposed by the original authority. 2. Heard the learned SDR. The respondents has made a request that the appeal may be decided on merits. 3. The respondent is manufacturing and clearing non-alloy steel product and paying central excise duty under the compounded levy scheme. On the basis of some invoices indicating purchase of alloy steel ingots, original authority held that they must have produced alloy steel products and cleared them clandestinely and accordingly confirmed the demand of Rs. 30,645/- along with interest and imposed equal amount as penalty. Commissioner (Appeals) has allowed the appeal of the party with the following findings and observations : As per facts on records, it is observed that the appellants are engaged in the manufacture of re-rolled products manufactured from non-alloy steel as they were working under the Compounded Levy Scheme. It is not the case where they were simultaneously also paying duty under Section 3 of the Act for rolling other than non-alloy product besides re-rolling non-alloy steel. Further, no evidence has been brought on record by the revenue to counter the contention of the appellants that their Mill was not capable of rolling of alloy steel also. Merely, on the basis of one invoice it is difficult to entertain and upheld the view that the appellants were also manufacturing rolled product from alloy steel. As such, this demand for recovery of duty under Section 3 of the Act in respect of one consignment of alloy steel cannot be upheld." 4. No material has been produced to contradict the above finding on fact that the respondents were not capable of rolling of products of alloy steel. In view of the above, the appeal by the Department is liable for rejection and accordingly, rejected.
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