2021 (12) TMI 957

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.... Return filed by the appellant with the Income Tax Department and ER 1/ER 4 return filed for the year 2013-14 was noticed i.e; excess production in respect of CPC over and above the ER 1/ER 4 return and hence it was alleged that the appellant has clandestinely removed such goods without payment of excise duty. Based on the above, on May 9, 2018, the Commissioner of CGST & CX, Patna II (hereinafter referred to as the Commissioner) issued a Show Cause - cum - demand notice to the Appellant proposing to demand excise duty on the quantities of the finished goods shown as excess clearance in 3CD form as compared to the ER 1 Return for the period 2013-14. The Appellant vide letter dated November 5, 2018 replied to the said show cause - cum - demand notice pointing out inter alia that the said difference is in relation to conversion of Calcined Petroleum Coke (CPC) into various grades viz. ROK, Fines and Screen and that the tax audit report has inadvertently included 7031.42 MT twice by considering the conversion from CPC ROK to CPC Screen and CPC fines in captive consumption details and yield of finished products both. The Appellant further contended that demand is based only on the figu....

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....Ex., Aurangabad [2005 (188) E.L.T. 107 (Tri. - Del.)] g.  M/S.Jai Balaji Industries Limited (Unit-Iii) Vs. Commissioner Of Cgst & Cx, Bolpur Commissionerate, Final Order No. 75583-75585/2020 Dated 12/11/2020 h.  Shivalaya Ispat & Power Pvt. Ltd. Versus Commissioner Of C. Ex., Raipur 2017 (357) E.L.T. 742 (Tri. - Del.) i.  Commissioner Of Central Excise, Aurangabad Versus Cosmos Films Ltd. 2013 (292) E.L.T. 116 (Tri. - Mumbai) The learned Advocate has also produced reconciliation copies to show the actual clearance as per ER 1 and as per Form 3CD for manufactured goods. He has also submitted the certificates from the Tax Auditor dated 17/06/2016 and 12/10/2018 certifying the reconciliation and explaining the reasons of difference between ER 1 and 3CD. He further submitted that the production ratio of the Appellant is approximately 1.3:1 to 1.40:1. Hence, for every 1.3-1.4 MT of Raw Petroleum Coke, approx. 1 MT of ROK Coke is produced. Thereafter, the ROK is further screened to form Screens and Fines. In view of the same, it is submitted that the quantity of Screens and Fines cannot be in excess to the Quantity of ROK Coke produced by the Appellant. He further....

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.... the lower authority. He also filed a synopsis of his detailed arguments. 6.  Heard both sides through video conferencing and perused the appeal records. 7.  In the instant case, it is seen that the Adjudicating Authority has confirmed the demand of excise duty only on the ground that there are differences in the quantity of manufacture of goods as per ER 1 and form 3CD as filed by the Appellant, without at all considering any of the explanation and reconciliation provided by the Appellant throughout the adjudication stage as also during the  audit memo stage. It is the case of the Department that the said Appellant has manufactured and cleared the goods to the extent of excess reported in form 3CD of Tax Audit Report as filed with the Income tax authorities. However it is seen that such allegation is only on the basis of the figure work of the Department without production of any other evidences for demand of excise duty for clandestine removal of manufactured goods. 8.  The Appellant has produced before us their Tax Auditor's certificates certifying the reconciliation which was also produced by the Appellant before the learned Adjudicating Authority and we ....

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.... the Appellant has been able to produce the relevant reconciliations to explain the differences in clearance figures as per ER 1 and as per form 3CD which was on account of inclusion of 7031.42 MT twice by considering the conversion from CPC ROK to CPC Screen and CPC fines in captive consumption details and yield of finished products both in the annexure to the Tax Audit report. 10.  The above submission is explained with the help of the figures provided in the table herein-above: The total amount of Raw Petroleum Coke consumed during the period in dispute is 18128.60 MT [Column C, Row - Consumption]. Hence, on applying the input : output ratio of 1.3:1, the total quantity of Calcined Petroleum Coke that can be manufactured by the Appellant amounts to (18128.60/1.3) MT which equals to 13945 MT (approx.). In "Column G, Row - Production" of the table, the total production by the Appellant amounts to 13948.25 MT. In view thereof, it is evident that based on the production norm of 1.3 : 1, the total amount of CPC manufactured during the period in dispute could only have been 13945 MT approximately. In the present case, the total production amounts to 13948.25 MT, which is nearl....