TaxTMI 
TaxTMI 
2015 (12) TMI 255
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....ppropriate duty. Appellant did not file any reply to the show cause notice nor appear for the personal hearing granted by the adjudicating authority. The adjudicating authority based upon the records available before him, confirmed the demands raised and also imposed penalties and demanded amount of interest and ordered for penalties of Rs. 4,35,000/-, on shortage of scrap. 3. Aggrieved by such an order, an appeal was filed before the first appellate authority. The first appellate authority after granting a personal hearing, upheld the order-in-original. 4. Learned counsel brings to my notice that the discrepancies in the stack taking done by the departmental officers. It is her submission that the entire exercise and recording the shortage was done on eye estimation. She would draw my attention, to the statement recorded of the factory manager, its indicates that there was no weighing done but entire stock is taken by eye estimation, it is her further submission that the demand of duty liability is on the ground that the short found MS scrap is converted and clandestinely cleared. It is her submission that the issue is now squarely covered by the majority order given by this....
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....presumptions are to be made, which is addressed hereunder : (i) The production capacity of the plant and machinery for manufacture of Aluminum Sections, though being old, is able to produce the entire installed capacity of 600 MT per annum. As per the appellant, the production capacity with such machines, is not sufficient to manufacture the alleged huge quantity alleged to be removed in clandestine manner, and moreover the experts i.e. chartered engineers after visiting and considering the working of the plant, has certified that the production that can be produced by working of the machine, can at most be 430 MT per annum. As rightly observed by the Hon'ble Member (J), the working of the machines in the appellant's factory was verified to ascertain the production capacity of the machines installed. This verification was done at the instance of the adjudicating authority. It is indeed noted by the Hon'ble Member (Judicial) that the authority had caused inspection of the working of the appellant's manufacturing activity of finished goods Aluminum Section, by a team of officers. Though their report is not on record, but the adjudicating authority, in his Order-in-O....
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....OCL/HPCL and remained unaccounted by the appellant. In the absence of any such information, despite clear direction from the Tribunal, I find it difficult to hold that the furnace oil was procured by the appellants and utilized the same without accounting for in records. Furthermore, it gives a chance and scope to explore the possibility to the appellants contention that Shri G.G. Bansal, one of their senior employee, was engaged in the activity of trading in furnace oil by procuring the same in the name of the appellant. It would also be not out of place to mention that during the relevant period, the furnace oil was allotted only to those persons who have quota. In my view, in the absence of further investigation as to who made the payment for the furnace oil cleared in appellants name, the same cannot be attributed to as unaccounted purchases of appellant. (iii) It is presumption that the appellant had or could have manufactured the aluminum sections from the job workers, is totally without any evidence as adjudicating authority was not able to bring on record as to who were the job workers who manufactured the aluminum sections for the appellant which were clandestinel....
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....he appellant, if any, could be clandestine manufacturing of aluminum billets in the appellant's factory. The entire show cause notice along with its annexures do not propose the charge of clandestine manufacturing and clearance of aluminum billets from the appellants factory. The entire show cause notice and annexures thereto proceeds on the ground that the appellant had clandestinely manufactured the aluminum sections and cleared the same without payment of duty. It is also on record that, for manufacturing of aluminum sections from the aluminum billets, only power is consumed for working of dies and moulds, and no further material is consumed. It is demonstrated from the records that the power consumption of the appellants factory during the relevant period remained same, as per the standard for the manufacturing activity of aluminum sections. It is also on record that the appellant did not have any Diesel Generating sets for the production of electricity which could have consumed for manufacturing of aluminum sections, allegedly clandestinely manufactured. In the absence of any such evidence, the presumption of consumption of furnace oil and aluminum scrap which was not accounte....
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....that there was seizure of finished goods from the premises of M/s. Vinviv and M/s. Allied Aluminum on the pretext that the same were clandestinely removed goods. The said goods were released on the ground that there was no evidence of identifying the said goods from whom the clandestine clearances were made. In this case, it is admitted fact that 95% of the goods sold by the appellant are cleared to M/s. Vinviv and M/s. Allied Aluminum, M/s. Chitra Hardware. If that be so, in the absence of corroborative or cogent documentary evidence, the entire case of the Revenue falls. (vii) There is no dispute on the fact that in adjudication proceedings, the charge of clandestine removal is definitely to be established on the basis of preponderance of probabilities. However, it cannot be merely on the basis of presumptions and assumptions. Suspicion however grave cannot replace the proof. As rightly pointed out by the Hon'ble Member (J) with detailed findings, the link between the documents recovered in search and the activities of the appellants in their factory is required to be proved. However, I find that due to various reasons, the Revenue has failed to prove the same. ....