TaxTMI 
TaxTMI 
2019 (2) TMI 1864
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....manufacture of M.S. Ingots and M.S. Scrap. The appellant is registered with the Department. They had intimated to the Department by way of ER-5 Return, that one unit (kg) of final products (M.S. Ingots) is manufactured by using 1.1 unit (Kg.) of inputs i.e. M.S. Scrap. The M.S. Ingots falling under Tariff Heading No.72061010 were shown as finished goods while M.S. Scrap, Sponge Iron, Pig Iron and CI Scrap falling under Chapter 72 were shown as principal units used for manufacture of finished goods. Based on observations of CAG's Audit that the production of M.S. Ingots as shown by the respondent in their records were lesser than the declared input-output ratio, the records of the party were examined and it appeared notionally that they have....
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..... M.S. Ingots. This Tribunal observed that from the copy of the ER-1 Return, the details of Runner & Risers were mentioned and the details of the sales were reflected. Accordingly, this Tribunal remanded the matter to the Original Authority to consider the final output of M.S. Ingots as well as the consumed Runners and Risers i.e. intermediate products from the original scrap. If the same was consumed than it will be added to the account of M.S. Scrap. Further direction was given to admit further evidence to be produced by the assessee. In the second round, the ld. Commissioner took notice of the contention of the assessee that in the process of production of M.S. Ingots, the quantity of Runners and Risers arises about 2.5% to 3% of the qua....
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....Further, it has also been noticed that the assessee have properly maintained RG-1, Form-IV, RG-23A Part-I etc. account for consumption, production and sale of the goods i.e. MS Scrap, Ms Ingots, Runners & risers." 5. Further, after verification of the data of consumption of scrap including recycling of Runners and Risers and the quantity of finished goods - M.S. Ingots., the ld. Commissioner observed that the Runners and Risers have been used in the production, then the assessee has fulfilled the ratio of quantum i.e. 1 M.T. of final products : 1.10 M.T. raw materials. 6. Ld. Commissioner further noticed the direction of this Tribunal in the Final Order regarding output of M.S. Ingots as well as consumption of Runners & Risers - intermedi....
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..... Opposing the appeal, the ld. Counsel for the appellant /assessee states that the whole demand as per show cause notice is mis-conceived and based on the theoretical calculation without any tangible evidence of suppression of production and/or clandestine removal. Further, reliance is placed on the ruling of this Tribunal in the case of Easter India Chemicals Ltd.and Raj Tandon Vs. CCE, Allahabad - 2017-TIOL 1118-CESTAT-ALLAHABAD, wherein this Tribunal held that input-output data in ER-5 Return for year 2007-08 was used to estimate quantum of goods manufactured in the year 2005-2006. This estimated manufacture is not covered or provided by any of the provisions of the Central Excise Act or Rules made thereunder. The show cause notice has n....