TaxTMI 
TaxTMI 
2016 (10) TMI 385
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....w.e.f. 07.08.2003, they have been clearing the goods after 25% enhancement of production capacity. The appellants submitted various documents like certificate of Chartered Engineer, Capacity Certificate by the General Manager, DIC Kotdwar, details of procurement of capital goods etc. in support of their claim. The Revenue by entertaining a view that the appellant did not make additional installation of machines and have not made expansion on such a scale and on such a nature, initiated proceedings to deny the exemption claimed by the appellant. Periodical show cause notices were issued to demand duty on denial of such exemption. Eight such notices covering period from 07.08.2003 to December, 2005 were issued. These were decided by the first impugned order dated 29.09.2006. Thereafter, three more such proceedings were completed against the appellant. The original authority continued to deny the claim for exemption and confirmed the demands against the appellant. Various penalties were also imposed on the appellants. These appeals were all directed against such orders, confirming duty demands and imposing penalties on the unit and on various individuals. 2. We have heard the ld. C....
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....tive. In the written submission the appellants gave point wise counter to the findings of the original authority on various facts: Sl. No. Findings in the impugned orders Rebuttals of the Appellant 1 Para 4.4 Chartered Engineer s certifiate dated 26.4.2004 noted that he visited the factory on 26.4.2004. How he could check the capacity as on 2.8.2003 as MTs, viz. before expansion? There is no basis of ascertaining the unit capacity mentioned in the certificate. * The said Chartered Engineer also visited the appellant s factory on 16.05.2003, before the substantial expansion was undertaken, and gave a certificate to the effect that the capacity of the unit was 4 MTs. This certificate was produced before the ld. Commissioner, as acknowledged in para 3.3(i) of the OIO dated 29.9.2006, however, the ld. Commissioner doubts the same without any valid reason and without producing any evidence to contradict the same. * The certificate along with its Annexures is self-explanatory. It is based on the visit to factory and practical observations done by the Chartered Engineer on site. 2 Para 4.3- The certificate dated 16.2.2004 issued by the GM, DIC is on the basis of ce....
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....6.5.2003. This observations is also based only on conjectures and surmises, without any supporting evidence. If there was any doubt, the ld. Commissioner ought to have caused inquiry/ investigation to ascertain the actual capacity of the furnace post expansion. Having not done that, the appellant cannot be proceeded against, only on the basis of suspicion. It is settled law that mere suspicion cannot take the place of evidence. In fact on inquiry done by the Department directly, M/s Eletrotherm (India) Ltd., who had executed the work of upgradation, had confirmed vide their letter dated 14.5.2004 addressed to the ld. Deputy Commissioner having carried out the upgradation of the furnace (page 333). This letter has been acknowledged at para 3.2 (iii) of the OIO, but the same has neither been considered not has any reason been given by the ld. Commissioner for disregarding the same. This is again a wishful thinking and comparison on the part of the ld. Commissioner, without any legal basis. Furthermore, the first expansion from 3 MT to 4 MT had two crucibles, whereas the second expansion had only 1 crucible initially in July 2003. The second crucible at a cost of Rs. 11.94 lakhs was a....
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....ower factor unit. The invoice of M/s Inducto Engineers & Traders for purchase of the power factor unit is available at page 347 and payment for the same was made through banking channels. In his certificate, by modification, the Chartered Engineer meant the alteration or change and not that the existing power factor unit was only modified. The certificate should be read holistically with facts/ documentary evidence. 7 Para 4.9 Production has increased to 1378 MT per month, which is abnormal and not commensurate with the expansion claimed. This conclusion again is only on the basis of suspicion, without any legal basis and without any technical evidence. Without prejudice to the above, it is submitted that at 4 MT, with heat taking 3 hrs. On 24 hour working, 8 heats are possible. In a day 32 MTs would be produced, which leads to 960 MT in a month, against the production of around 803 MT a month, recorded prior to expansion. Subsequently, with 5 MT capacity, and heat time of 2.5 hours, it works out to 9.6 heats in a day, which works out to 48 MTs in a day. This translates to 1440 MTs a month, against the production of 1378 recorded. Thus, there is nothing abnormal. 8 P....
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....stalled capacity, investment in machinery etc. Again on 04.07.2003, the appellants intimated the jurisdictional Superintendent regarding beginning of expansion of installed capacity in their unit and requesting for exemption. On 03.08.2003 intimation was given to the jurisdictional Superintendent regarding commencement of trial production after undertaking expansion of the installed capacity by 25%. The same day the jurisdictional Deputy Commissioner directed the appellants to submit documentary proof with regard to installed capacity of the machinery and capital investment prior to and after 07.01.2003. The details were submitted on 11.08.2003 and subsequently on different occasions. 7. The above background is recorded to indicate that the appellants are in regular communication with the department regarding their claim for exemption under the said Notification. As could be seen from the findings of the original authority, various doubts and suspicion have been raised against some of the documents and certificate submitted by the appellant. We note that the appellants have explained their position vis-a-vis these doubts. In fact, the case for denial of exemption was mainly soug....
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....ion by competent person was ever made by the department in support of any of the presumption raised in the original order. In fact, the original authority records that the abnormal increase in production and decrease in PMT consumption of electricity establish that the appellant before issue of exemption notification were producing more goods but were not recording in the production. We find such observation is purely in the realm of presumption and cannot form basis of any legal conclusion. Similar such presumptions adverse to the appellants have been made by the original authority. As already noted, all these suspicion and doubts could have easily been verified during the relevant period itself so that the facts relevant to the case could be satisfactorily cross verified and admitted. Having not done so during the relevant time it is not open to the Revenue to deny exemption on such presumption and doubts. No verification of such facts relevant to 2006 could be made after ten years now. 10. We have perused the various documentary evidences submitted by the appellant. The fact that emerges is that the appellant originally had capacity of 3 MT which was increased to 4 MT in the ....