TaxTMI 
TaxTMI 
2024 (2) TMI 956
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....e Appellant is required to file ER 6 Return on a monthly basis. At the end of the year, they have to file an Annual Report under ER-4 showing the actual consumption. On the ground that the consumption shown in the ER-4 Return was higher than the consumption shown in the Monthly ER-6 Returns, the Department worked out the likely production of steel articles towards differential iron ore consumption and issued Show Cause Notice demanding duty of Rs. 82,68,81,301/-. The Adjudicating Authority after going through the factual details and statutory provisions dropped the demand. Being aggrieved, the Revenue has filed the present Appeal before the Tribunal. 2. The Learned AR reiterates the allegation contained in the Show Cause Notice and submits....
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.... that the Department has not come out with any corroborative evidence that the goods in question were manufactured and were cleared clandestinely to any third party. Finally, he submits that being a reputed Public Sector Undertaking working under Ministry of Steels, even hypothetically it cannot be assumed that such huge quantity of 1,48,942 MT of saleable steel could have been manufactured and sold by them clandestinely. 5. He also relies on the detailed findings of given by the Adjudicating authority and prays that the Revenue's Appeal may be dismissed on merits. 6. He further submits that the CERA Audit took place in the month of November-December 2009 and this issue was raised for which the Respondent had filed their reply clarifying ....
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....scrutiny of their Annual Report (ER-4) it was found that the said noticee had actually consumed 62,76,279 MT of Iron ore during the above period which lead to suppression of consumption of iron ore by 2,33,243 MT and consequently suppression of production of 1,48,942 MT of saleable steel. This resulted in evasion of central excise duty amounting to Rs. 82,68,81,301/-. 13. The noticee has submitted that until physical stock taking, the consumption of raw material is shown on volumetric basis during the financial year which is reflected in the ER-6 returns and the consumption is finalized on physical stock taking which is stated in the ER-4 return and there is no suppression of production. Assumption in the SCN that the entire quantity of ....
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....ed on presumption and conjectures have to set aside." Charge of clandestine removal being a serious charge, it is required to be proved beyond doubt on the basis of affirmative evidence. Demand should be based on solid evidence and not on inferences" - CCE vs Shree Narottam Udyog 2003 (158) ELT 40 (CESTAT). Same view has been taken in the Utkal Galvanisers v CCE 2003 (158) ELT 42 (CESTAT), IOC Ltd V CCE 2003 (158) ELT 49 (CESTAT SMB), Durga Trading vs. CCE [2002 (148) ELT 967 (CESTAT)]. Clandestine removal is a serious charge against the manufacturer which is required to be discharged by revenue by production of sufficient and tangible evidence. Standard of proof has to be on the basis of absolute proof and not on the basis of preponderance....
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....reported in 2004 (169) E.L.T. 251 (T) has held that when the stock position is arrived at on the basis of estimation, the allegation of shortage of stock and consequent illicit removal of finished goods cannot be sustained. A plethora of case laws hold that provisions of Section 11A would apply in making demands of duty on deficiencies found during stock taking. The appellants based many reasons for discrepancies between the RG-1 and the physical stock. For example, the RG-1 is only based on estimated production and not based on actual weighment. Physical stock is also based on estimation of weight on the basis of volumetric estimate and conversion to theoretic weight based on sectional weight. A comparison between two estimation is inheren....