2018 (8) TMI 1212

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.... Eight) proposed to be confirmed in the show cause notice dated 05/05/2014, Revenue has filed the present appeal. 2. We have heard the learned A.R. Shri Pawan Kumar Singh appearing for Revenue. Nobody appeared for the respondent. 3. Having gone through the impugned order, we find that the respondents are engaged in the manufacture of MS Ingots. During the course of audit conducted in their factory and based upon the scrutiny of records the respondent was asked to declare their input output ratio which the respondent complied with. Statement of their employees was recorded whereas he again gave the input output ratio. Based upon the same Revenue entertained a view that the respondents have suppressed their production for the Financial ....

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....loys depends upon a variety of factors. These factors may be, inter alia, as under: a. The grade and purity of Sponge Iron which may contain different percentage of iron content, dust, oxidized iron/rut; b. The grade and purity of HMS/MS Scrap which may contain different percentage of iron content, dust, oxidized scrap/rust; c. The consumption of sponge iron depends upon the quality of scrap being used which, depending upon source, may vary in percentile Ispat content; d. The metallurgical process adopted for production, the working conditions in production unit, the power supply conditions, the technology used for production and the fund flow for procuring raw material also affect the production to some ....

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....ine of removal of such goods requires clandestine procurement of raw material and unless and until cogent evidence is adduced for clandestine procurement of raw material, suppressed production from such clandestinely procured raw material & clandestine removal of so produced goods, the allegation of suppressed production and clandestine removal of such goods cannot sustain under law. xvi. That, therefore, the allegation of evasion of the duty demanded in the SCN is nothing but pure assumptions, which is not sustainable under law. xvii. That, the onus to prove the allegations leveled in the SCN is cast upon the department and the department. The department is duty bound to discharge onus cast upon it and adduce cogent and c....

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....ry to a large extent, depending upon content of iron and percentage of impurities in the sponge iron. xxiii. Similarly, M.S. Scrap and H.M. Scrap have varying degree of iron content and corresponding degree of impurities like dust & rut and the low degree of iron content in these scraps also results in to low yield of finished iron ingots. xxiv. That, if the Noticee get some sponge iron or scrap cheaper even if high in impurities on credit, they have to go for it and as a result, the recovery of output goes down. xxv. That, the standard input to output formula can only be adopted by big manufacturers who adopt standard procedures and bank upon standard suppliers and/or standard inputs. Whereas, the standard input ....

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....r speak for itself that it was a non-serious and unapproved step. xxx. That, therefore, the demand of duty is not justified and the allegations regarding clandestine manufacture & removal of goods is not sustainable under law and the same deserves to be dropped summarily. xxxi. That, the Noticee have not contravened any provision of law as alleged in the SCN and hence are not liable for any penalty. They placed reliance on the ratio of following cases: * Chandan Tobacco Co. vs. CCE, Vapi 2011 (270) E.L.T. 87 (Tri.-Ahmd.). * Ravi Foods P. Ltd. vs. CCE, Hyderabad, 2011 (266) E.L.T. 399 (Tri.-Bang.). * Amar Ceramics Ltd. vs. CCE, Rajkot, 2007 (213) E.L.T. 64 (Tri.-Ahmd.). * CCE, Allahabad v....

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....Ingots [MT] Consumption of raw material per MT of Ingots Sponge Iron + Sponge NDP 23616.800 + 15.200 = 23632   24214.32 975.96 Kg Silico Magnese & Ferro Silicon 144.096 + 2.055 = 146.151 6 Kg Pig Iron 200.860 8.29 Kg Total Mineral Content 23979.011 990.28 MS Scrap (DP) 1508.800 62.31 Kg MS Scrap (NDP) 506.520 20.91 Kg HMS (imported) 2126.890 87.84 Kg Remelting Runners/Risers 383.140 15.82 Kg Total scrap conent 4525.350 186.89 Kgs Total 28504.361 1177.17 Kgs   xxxvi. That, therefore, during the year 2009-2010, the ratio of consumption emerges to be as under: Sponge Iron: 990.28 Kg per MT of....