TaxTMI 
TaxTMI 
2016 (12) TMI 716
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....Accounts). The stock verification conducted by the officers allegedly resulted in shortages of 1,236.240 MT of sponge iron. The said proceedings were recorded in Panchnama dated 02/03.09.2005, drawn on the spot. Shri Boyar accepted the said shortages and debited the amount of Rs. 20,98,245/- in their PL Account. 4. Apart from the shortages, the officers also recovered certain documents, loose papers, records, computer hard disk and pen drives from the factory premises of the respondent. Scrutiny of the said documents led the officers to belief that the respondents have clandestinely cleared 495.240 MT of sponge iron during the period 28.08.2005 to 30.08.2005, without payment of duty of excise. 5. On the above basis, proceedings were initiated against the respondent by way of issuance of Show Cause Notice dated 31.05.2005 proposing to confirm the duty of Rs. 29,38,399/- along with confirmation of interest and imposition of penalty. The Show Cause Notice culminated into an order passed by the original adjudicating authority confirming demands and interest, as proposed and imposing penalty of equivalent amount under Section 11AC of Central Excise Act, 1944 read with Rule 25 of the C....
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....system bit were accepted as declared by Shri Sunil Kumar Bhoyer, and on that assumption the stock was determined by taking a dip reading. Such method have not found approval for determining the stock, especially the dip-reading method may not result in correct stock determination. The Appellant has supported this contention by placing reliance on the decision in the case of Orient Cement V/s CCE - 1995(79) ELT 643(T) and IOD V/s CCE- 2003 ( 1580 EL T 49 (T) referred to at Para- 3.15 supra. The shape of a Hopper and the submission that the storage capacity would not be uniform are factors which would compel one to arrive at a finding that the dip reading method applied cannot determine the actual quantity of stock. The acceptance of Shri Sunil Kumar Bhoyer ought not to have been taken as confirmatory unless such declaration relating to the stock position was confirmed by physical verification merely because the stock taking method has been objected to at a later date is no ground or evidence to render the stock arrived at by a doubtful method to be acceptable. The Original Authority's finding in this regard therefore cannot be upheld. Moreover, it is in record that the quantitie....
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....ing evidences in the form of statement of buyers, transporters, flow back of funds, extra use of electricity, etc. He has rightly concluded that huge quantity of sponge iron would require a large fleet of lorries/trucks for their transportation and in the end in the absence of any such evidence on record, the findings of clandestine removal cannot be upheld. I also note that the Revenue has not produced any evidence for procurement of such a huge raw-material to manufacture the said quantum of assessee's final product. Before the final product is removed, the same is required to be manufactured. As such, heavy onus is placed upon Revenue to establish the manufacture of the said goods. There are no statements on records, either admitting the manufacture of the said goods or removal of the same in clandestine manner. As such, I fully agree with the Commissioner (Appeals) that the findings of clandestine removal based solely on the shortages detected by the officers cannot be upheld. 10. As regards Revenue's allegation for clandestine manufacture and removal of 495.000 MT of sponge iron during the period of three days preceding to the visiting of officers, I find that the Com....
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....anerjee's contention with reference to the charge framed at Para 8 of the Impugned Show Cause Notice regarding non accountal of production of sponge iron of 28.08.05, 29.08 05 and 30.08.05 totaling to 495 MT reproduced at Para 9 of the Impugned Show Cause Notice, had contended that such calculation was "on the basis of data retrieved from computers seized from their factory under Panchnama dated 02/03.09.05 is that the kiln started for a new campaign after shut down and it takes a couple of days to give a quantifiable and qualitative production. It appears from the production report shown to him that the production of sponge iron on three days were of Off grade and not fit for sale. That might be reason that the same was not reported to Accounts/Excise Section of their company for accounting". This plea also has force to reject the charge of unaccounted manufacture. Since what is to be entered as excisable goods would be fully finished material fit for marketing. I have also perused the contents of Para 9.13 of the Order impugned wherein the Appellant had contended before the Original Authority that "a perusal of DSA/RG-1 under Annexure-II to the show cause notice in the Month ....
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....Sponge, Raigarh nor M/s Prakash Industries Ltd, have been questioned to establish that clearances of the said quantity to both the parties have been effected on 2.7.2005 to confirm the allegation that the truck movement cum dispatch advice shows clearances of the said quantity to both the patties have been effected on 2.7.2005 to confirm the allegation that the truck movement cum dispatch advice shows clearance of goods from the factory without payment of duty. The allegation made out on two such "advices" without questioning the security officer who has stamped on the reverse of the "advice" when more than 300 such "advices" were in the custody of the investigators, does not induce confidence to arrive at non duty paid removal. Similarly, in respect of delivery advice Nos. 323,321 & 301 in the name of M/s Shobha Ispat, Raigarh, M/s Harsh Vinimay, Raigarh and M/s Shree Consultant, Raigarh in relation to invoices No. 1604 dated 23.08.05, 1601/1602 dated 24.08.05, 1423 dated 08.08.05 (mentioned at the back of dispatch advice ) in the name of M/s Siddhi Vinayak, M/s Sai Ram Steel & alloys, Jalna and M/s Siddhi Vinayak, M/s Sai Ram Steel & alloys, Jalna and M/s Siddhi Vinayak Alloys P.....
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.... and no liability can be fixed simply on the basis of speculation. The Appellant have reiterated this contention at paras 4.7 to 4.9 supra. It is my considered view that it is quiet likely if the statements of such persons had been recorded during the course of investigations; further enquiries conducted, the intent and purpose of such entries would have brought out the details as to how the said register was being prepared and maintained. In the absence of such cross verifications from the author of the register and the persons maintaining such record evidently leads to the rejection of the document in totality since it is not a prescribed statutory record. The entries in the register are not reflecting any corroboration as is being made out in the impugned Show Cause Notice and relied upon by the Original Authority. 25. Reliance has been placed in certain Registers and other documents kept in the laboratories and elsewhere without any corresponding evidence of the said trucks mentioned therein having left the premises. The allegation of parallel invoice as made out in the show cause notice is also not sustainable as such parallel copy To invoice as made out in the show cause not....