TaxTMI 
TaxTMI 
2018 (10) TMI 1152
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.... of 100 TPD (tonnes per day) and the other kiln of 225 TPD. 3. A team of central excise officers visited the premises of the appellant on 15 December 2008 and a punchnama was drawn. Several documents were resumed for further examination, as it appeared to revenue that there is a prima facie case of suppression of production and clandestine removal of the finished goods. 4. The brief facts as per the show cause notice are that- 4.1. It is the case of the department that during scrutiny of the loose papers kept in File No. 9 revealed that at page no. 147 and 149, the date wise raw material consumption and production of sponge iron during the month of August, 2008 have been recorded. Upon comparison of the production of sponge iron recorded in such loose papers with that of records in Daily Stock account it appears that the appellant has suppressed production of sponge iron by 780 MT during the month of Aug, 08. involving duty of Rs. 23,30,416/-. Further on scrutiny of Daily Production Reports kept at page no. 101 to 145 and 151 to 159, it revealed that the said reports are for the period 17.11.1008 to 07.12.2008 and 09.12.2008 to 12.12.2008, the same are showi....
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....iod April, 08 to Dec, 08. Similarly, scrutiny of loose papers, marked as File No.21, similar details were recorded like the details of dispatches, truck no., quantity and name of the customers. upon comparison with the sales invoices, it appears that the appellant had clandestinely removed 403.590 MT of sponge iron for the period March, 08 to Nov, 08. Similar details have also been found in gate register (Record No. 43), it appears that the appellant had clandestinely removed 48.190 MT and 28.580 MT of sponge iron respectively. Similarly, on scrutiny of the daily Analysis Reports sheets, it was found that it contains details of chemical analysis of sponge iron and on some pages, it was found that details of analysis of sponge iron dispatched were mentioned. Therefore, on comparison with the sales invoices, it was found that the appellant have cleared 119.380 MT of sponge Iron. 4.3. From the above facts, it appeared to the revenue, that the appellant had suppressed production of sponge iron by 3351.335 MT valued at Rs. 6,10,79,702/- involving Central Excise Duty of Rs. 85,77,991/- and clandestinely removed 912.070 MT of sponge iron valued at Rs. 1,63,14,716/- involving Central....
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....roduction report, process log sheet and process log register, in comparison with daily stock register (RG-1). The Appellant submits that the duty demand cannot be confirmed merely on the basis of the discrepancies noticed between the private records and the daily stock Register. There is no corroborative evidence of alleged suppression of production/clandestine removal, such as procurement of raw material, dispatch of finish goods, excessive consumption of electricity and consideration for procurement of excess raw material and receipt of consideration of alleged clandestinely removed finished goods, etc. It is settled law that the charge of excess production /clandestine clearance is required to be proved by the Department on the basis of corroborative evidence and not merely on assumptions and presumptions or conjectures and surmises. The learned Commissioner have estimated the production suppressed on the basis of feed rate of raw material in the kiln, which is erroneous and untenable. The learned Commissioner failed to appreciate the fact that the physical stock of goods- raw material and finished goods almost matches with the book records. The demand have been confirmed on the....
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....t is appeared that the data contained in file No. 9 which is annexure to the panchnama was reliable. The contention of the appellant that such loose sheets were reflective of production plan/target for the month of August 2008 and not the actual production figures could not be made basis for assuming suppressed production is vague. It was further contended that from perusal of consumption of raw material as per register, reveals that the quantity of sponge iron shown as manufactured in RG 1 register was in consonance with the raw material issued for the manufacture during the month of August 2008. 10. The adjudicating authority rejected the contention as unsubstantiated by observing that the reasons of non-achievement of targets are not forthcoming. 11. It further appeared that the daily production reports prepared by the production department of the appellant, kept at page No. 101 to 145 and 151 to 159, of file No. 9, it appeared that the production department of appellant submitted the said reports to the management showing kiln wise consumption of raw material and production of sponge iron, with the remarks of difficulties faced during the shift of the day, if any. The Ld.....
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.... suppressed production of sponge iron. The learned Commissioner further observed with regard to the production of sponge iron on the said 3 dates, is less on the basis of the feed rate. Further the liability of duty on appellant had been worked out on the basis of the variance as found in the production record/documents with the actual production record/daily stock account. 15. As regards the contention of the appellant in the reply dated 12 March 2012 and on the basis of some loose papers and the Daily production reports, suppressed production is worked out at annexure 02 of the SCN. It was submitted that on bare perusal of the said documents, reveals that out of total daily production is reports for less than 30 days, the suppression of production is alleged only for 22 days, wherein also the difference in quantity with that of the quantity recorded in RG 1 register comes to less than 5%. It is also contended by the appellants that on some dates particularly on 20 March 2008, 31st March to May 2008 and 4 July 2008, the recorded production was actually on higher side. 16. Having considered the rival contentions, we find that as per Panchanama, during search, on physica....
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....ed the following aspects : (i) To find out the excess production details. (ii) To find out whether the excess raw materials have been purchased. (iii) To find out the dispatch particulars from the regular transporters. (iv) To find out the realization of sale proceeds. (v) To find out finished product receipt details from regular dealers/buyers. (vi) To find out the excess power consumptions. 13. Thus, to prove the allegation of clandestine sale, further corroborative evidence is also required. For this purpose no investigation was conducted by the Department." 17. We find in the present case, there is no evidence of excess purchase of raw material, transportation thereof, sale of finished goods, realization of sale proceeds, excess power consumption, transportation of finished goods. We further find that, during search no goods were found in excess or short. We also rely on judgment of Hon'ble High Court of Patna in the case of CCE Vs Brims Products (supra), where the Hon'ble High Court held that assumptions and presumptions cannot take place of positive legal evidence which is required for proving the charge. We al....