2013 (4) TMI 331

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.... work basis and exported it to M/s. IMI TAMI INSTITUTE AND DEVELOPMENT LTD., ISRAEL, under BOND. The quantity of the intermediate goods received from the job-worker was 73.2 Kgs. The said intermediate goods received from the job-worker were further subjected to process called Salt Breaking Process, Sieving, Filtration, Distillation, Testing. The goods were finally packed and labeled before its clearance from their factory premises. After carrying out such above mentioned process, the appellant had shown the output of 25.3 Kgs. finished goods. This reveals that there is loss of 47.9 Kgs. of the finished goods. It was alleged that this variation between the quantity receipt from job worker and the quantity of final product manufactured was be....

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....or denovo proceedings. The adjudicating authority in denovo proceedings after following the due process of law confirmed the demands raised in the show cause notice along with interest and also imposed equivalent amount of penalty. On an appeal against such an order, the first appellate authority has reduced the demand of duty to Rs.1,60,605/- along with interest and also upheld the equivalent amount of penalty under Rule 25 of the Central Excise Rules, 2002. 4. Ld. counsel would draw my attention to the order of the first appellate authority and order of the Tribunal while remanding the matter back. It is his submission that the chartered engineers whose services were requisitioned by the appellant for certifying the yield of the final pr....

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....orded by the appellant of a bulk drug intermediate. I find that the chartered engineers certificate which was produced before the Tribunal in the first round of litigation reads very clearly that the manufacture of 25.3 kgs from an input of 73.2 kgs is quite justifiable as per the technical details shown in the attached sheet. In my view, the impugned order upholding that the appellant is liable to pay duty on the balance amount of 10.43 kgs seems to be totally misplaced in as much as there is nothing on record which indicates that there was a manufacturing of the excess quantity and clearance of the same from the factory premises of the appellant. 8. I find that the judgment of the Tribunal in the case of PCL Oil & Solvents Ltd. is direc....

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....Tri. Bang.)], it was observed that theoretical formulas based upon the consumption of the raw material cannot be made the basis for arriving at the correct production. The ratio of all the above decisions is to the effect that the charges of clandestine activities cannot be upheld on the basis of theoretical input-output norms. The same are required to be corroborative by production of independent evidences. Examining the case file from the above angle, we find that apart from the input-output ratio, which has been made the basis, there is no other evidences on record to show that the appellant either did not receive the raw materials, on which they have taken the credit or after receiving the same and availing the credit, the same stand r....