TaxTMI 
TaxTMI 
TaxTMI 
2021 (6) TMI 856
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....ppellant is a manufacturer of iron and steel products viz. M.S. Ingot and TMT bars, which are dutiable. The major raw materials are sponge iron and pig iron, ferrous alloys, M.S. Billets, etc.. The appellant generally filed their returns with the Department and deposited the tax. The books of accounts were also audited under the provisions of Companies Act as well as Income Tax Act. The appellant has manufactured ingots from sponge iron, being 34,306 M.T. in 2011-2012 and 16,940 MT in 2012-13 of ingots. Most of the suppliers of the sponge iron are located in the near vicinity, in the same jurisdiction of the CCE, Raipur. Further, ingots are power intensive products, which is manufactured in electric furnace. The appellant purchases power fr....
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....ty worked out on such shortage, on the presumption of clandestine removal, worked out to Rs. 29,12,365/-, the same was deposited - Rs. 16,48,000/- by debit to cenvat account on 5.6.2012 and Rs. 12,64,365/- by challan no.00065 dated 14.06.2012. 4. Subsequently on 6.2.2013, the officers recorded statement of the Director, Shri Gurpreet Singh Chandok under Section 14, wherein he, inter alia, stated that he is the Director looking after the management and is the Authorised person for the purpose of excise matters. Further, he did not dispute as regards the shortage worked out by the Revenue of 725.01 MT of ingots on 5.6.2012. He further stated that he was unable to explain the actual reason for physical shortage, but the main reason for shorta....
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....ding of higher production than the actual (being recorded on estimate basis). Thus, such shortage is due to high burning loss relatable to 3 to 4 previous accounting years. It was further urged that the appellant has not resorted to any clandestine removal of any finished goods or raw materials. It was further urged that in the facts and circumstances, the show cause notice may be dropped. 7. The show cause notice was adjudicated by the Joint Commissioner on contest, who was pleased to confirm the proposed duty as well as its appropriation from the pre-deposit made during investigation. Further, interest as well as equal amount of penalty was imposed under Section 11 AC (1)(a) of the Act. Further, penalty of Rs. 2000/-was imposed for viola....
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....t in absence of any seizure or inspection of any goods being removed without the proper documents or payment of duty. No buyer of alleged clandestine removal has been identified nor any flow back of cash for such transaction. Further, there is no seizure of un-explained cash in the premises of the appellant. For removal of 725 MT of ingots, about 36 to 40 trucks/trips will be required as one truck load is about 18 to 20 MT. Not a single truck load has ever been intercepted for the alleged clandestine removal. The clear case of Revenue and confirmation of demand is on the uncorroborative seizure of the finished goods, found in the course of defective stock verification. 12. Further, urged that so far the quantitative data is concerned, prod....
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...., wherein it was held that admission by the authorised signatory of the shortage does not conclusively establish the charge of clandestine removal. 14. It is further urged that the demand of duty is based on the presumption, there being no actual evidence of shortage. Further, there is no corroborative evidence brought under record with respect to the alleged clandestine transaction of 725 MT of ingots valued at Rs. 2,35,62,825/- (@32,500 p.m.t.). It is further urged that simple allegation of clandestine removal is not enough, and the same has to be corroborated by the Revenue beyond reasonable doubt, as held by the Hon'ble Punjab & Haryana High Court in the case of CCE Vs. Anand Founders and Engineers - 2016 (331) ELT 340 ( P&H) and Allah....
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....he manner of calculation. 18. Having considering the rival contentions, I find that the burning loss in this type of industry varies from time to time depending upon the quality of inputs, the condition of furnace, climatic condition, etc. I further find that the Director of the appellant company at the time of recording of his statement under Section 14 gave a plausible explanation, that shortage is attributable to high burning loss depending upon the various factors and failure by them to record the actual burning loss, as the production is recorded on the estimate basis, whereas the sale of finished goods is recorded on actual weight basis. Further, I find that the appellant also manufactures M.S. Billets, for which M.S. Ingots is the r....