2016 (10) TMI 867

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....spondent (M/s. J.J.Re-rollers) are engaged in the manufacture of window sections, angles, flats, CTD bars, etc. liable to central excise duty. Pursuant to an audit conducted on the records of the respondent, the Revenue entertained a view that the main respondent have resorted to suppression of production and clandestine clearance without payment of duty. Proceedings were initiated against the main respondent and two of the Directors of the main respondent. A demand of Rs. 5,19,14,512/- was made with a proposal to impose various penalties on them. The case was adjudicated and vide the impugned order, the ld. Commissioner dropped all the proceedings against the respondent. Aggrieved by this order, the Revenue filed these appeals. 3. We ha....

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....ing as below:- "9. On going through the case file, I find that the present case pertains to the period August, 2004 to December, 2008 and during the period in the month of September, 2007, the average consumption of power was minimum i.e. 91 units per M.T. production of finished goods. The proposed demand is based on this minimum consumption, however, under the impugned show cause notice no basis has been given as to what electricity consumption would be ideal. Whereas the Noticees in their written and oral defence putforth  number of reason for the fluctuations in electricity consumption in their factory, such as consumption of electricity for the other purposes viz. workshop situated in the factory, straightening machine, qu....

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....her, we note that all the incomes have been taken out of recorded balance sheet and the attempt by the Revenue to interfere the linkage between the clandestine clearance of the excisable goods to that income has not been materially supported by any evidence. We also note that the main respondent had actually suffered losses of more than Rs. 1 Crore/ each during the year 2004-05 and 2005-06 as per the books of accounts. We are in agreement with the Original Authority and hold that in the absence of any tangible evidence, the financial transaction as per the Balance Sheet and other financial dealings cannot be questioned without any substantial evidence to make a demand of central excise duty based on the interference and presumption. The sam....