AI Drafter 
TaxTMI 
TaxTMI 
2017 (4) TMI 151
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....985 and are availing Cenvat credit of duty paid on Sponge Iron along with other inputs. The Central Excise officers visited the factory of the respondent on 03.03.2006, after intercepting one truck carrying Sponge Iron without accompanying invoices. The officers under took verification on 04.03.2006 at the factory premises during the which it was noticed that there was excess stock of MS Ingots to the tune of 116.487MT and shortage of stock of Sponge Iron and Pig Iron . From the factory premises, certain records were also withdrawn for further scrutiny. Data was also recovered from the computer of the respondent during search operation and the same was transferred in Pen Drive as part of Panchnama. The Revenue undertook investigation agains....
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....The present appeal has been filed by Revenue challenging the dropping of Central Excise duty demand. The main grounds raised by Revenue in their appeal are as follows:- (a) The Commissioner has failed to appreciate the fact that at the time of verification, the Central Excise officers had found significant shortage in respect of Sponge Iron as well as Pig Iron. They also had found excess quantity of final product i.e. MS Ingots. The discrepancies also stand admitted by Shri K.P. Patel, Director. (b) The Commissioner has not considered the fact that the demand is based on the records withdrawn by the Central Excise officers from the factory on 04.03.2006. The demand is also based on data retrieved from pen-drive which was c....
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.... based on any cogent, tangible or corroborative evidence and on the basis of unauthentic private records. (d) The ld. Commissioner (Appeals) has set-aside the demands on the basis of findings that there is no evidence produced by Revenue regarding purchase of raw materials, transportation of raw materials, use of labour, electricity etc. and no evidence of flow back of funds. Accordingly, they have submitted that the demand of said duty cannot be upheld. They have also relied upon various case laws. 5. With the above back ground, we have heard Shri M.R. Sharma, ld. DR appearing for the Revenue and Shri K. Kurmy and Shri Ashok Anand, ld. Advocates for the assessee. 6. The appellant is engaged in the manufacture of MS Ingots....
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....thereon at the rate of 16%, total amounting to Rs. 9,31,226/- has also been demanded from the respondent. 8. After going through the records of the case, I find that the above findings of the Commissioner (Appeals) is based on the records of the case. In the impugned order, the Commissioner (Appeals) has taken the view that the demand raised against the respondent cannot be sustained on the evidences produced by Revenue as a result of investigation. He held that demand cannot be upheld merely on the basis of loose slips/ private records which have not been corroborated by any other record, private of statutory. Specifically, he has cited following reasons:- (a) Revenue has not procured any incriminating documents such as paralle....
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....rector or anyone else of the respondent has ever been questioned about such details found in the private records. Under these circumstances, I am of the view that the demand upheld on the basis only of such private records cannot be sustained. The allegation of unaccounted procurement of raw-material has not been corroborated by any other document recovered by Revenue during investigation. It is also noted that the case is inadequately presented inasmuch as no investigation appears to have been made in respect of the sellers of raw materials or buyers of finished goods, transportation of such goods or even flow of funds. The total quantum of alleged production, on which duty demand has been raised, has been arrived at only by calculation....