TaxTMI 
TaxTMI 
2004 (2) TMI 206
X X X X Extracts X X X X
X X X X Extracts X X X X
....Kgs. from which 2,030 sacks were alleged to have been manufactured and removal involving duty Rs. 4,758/-; that it was also alleged that Appellant No. 1 had despatched 1,18,546 bags without payment of duty amounting to Rs. 1,44,572/-; that the Department also alleged on scrutiny of Daily Production Slips for the period from November, 2000 to March 2001 (up to 18-3-2001) with RG1 register that the Appellant No. 1 had accounted inflated quantities of wastage (31,154 Kg) of PP/HDPE whereas the actual wastage was 9,466.90 Kgs. 2.2 He further mentioned that the Commissioner, under the impugned Order, has (i) ordered to recover the Cenvat credit amounting to Rs. 2,320/-; (ii) confirmed the Central Excise duty amounting to Rs. 4,758/-; (iii) confirmed the duty amounting to Rs. 1,44,572/- leviable on 1,18,546 sacks removed without payment of duty; (iv) confirmed the duty amounting to Rs. 28,00,917/- leviable on 2,16,307 Kg of PP/HDPE Fabrics cleared in the guise of waste. (v) &n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ive evidence, no presumption could be drawn that there was clandestine removal of the goods; Reliance has been placed on the decision in the case of Oudh Sugar Mills Ltd. v. Union of India, 1978 (2) E.L.T. (J172) (S.C.) and Dunlop India Ltd. v. CCE, 2001 (132) E.L.T. 345 (T). He also referred to the decision of the Tribunal in the case of Shram Shakti Polytex Pvt. Ltd. v. CCE, Jaipur, Final Order Nos. A/548-550/2002-NB, dated 17-5-2002; [2002 (144) E.L.T. 183 (T)] wherein the demand of duty had been set aside on the ground that there was no clandestine removal of bags by showing waste in excess; that the facts of Shram Shakti Polytex and the said decision is fully applicable. He also relied upon the decision in the case of Rajasthan Petro Synthetics v. CCE, Jaipur, Final Order No. A/231/2003-NB, dated 2-5-2003; [2003 (160) E.L.T. 297 (T)]. Finally the learned Advocate submitted that they have been directed to prove the negative by giving finding that they had not produced any documentary evidence about the generation of waste and reasons for not recording the waste in daily production report; the mere fact that the wastage was not recorded after tape and fabric stage cannot be made....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at they were recording excess waste in the statutory records than the actual waste generated; that all this goes to show that the Appellant No. 1 were intentionally evading the payment of duty. He, further, submitted that Shri K.K. Mahajan had admitted in his statement dated 3-5-2002 that the excess wastage shown in RG1 register was in fact the inferior quality of HDPEZ/PP fabric which was cleared in the guise of excess wastage; that Shri Mahajan has also admitted that Kacchi Slip prepared by the supervisors were destroyed by them; that Shri Nirmal Karanpuria had also admitted the destruction of records during construction work; that thus the Department was left with no other option but to calculate the quantity of wastage actually generated before November, 2000 on average basis arrived at from the daily production reports resumed for the period from November, 2000 onwards; that had there been any rejection of fabric/sacks by their customers on account of poor quality, it should have been reflected in RG1 register; that thus their contention that when fabric did not conform to the customers' parameters was rejected is not acceptable; that thus the percentage of wastage generation ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o. 1 has not succeeded in controverting the findings contained in the impugned order, in this regard. We, therefore, uphold the demand of duty of Rs. 1,44,572/- and hold that the Appellants are liable to penalty also under Section 11AC of the Central Excise Act as the excisable goods had been cleared without payment of duty and intent to evade payment of duty is apparent as no prescribed invoices were issued at the time of removal of goods. 7.Regarding charge of clearance of fabrics in the disguise of waste, we observe that no direct material or evidence has been brought on record by the Revenue in support of the charge. It is well settled law that duty cannot be demanded merely on the basis of assumptions and presumptions. It has been held by the Supreme Court in Oudh Sugar Mills that the findings on the strength of a show cause notice, issued on the basis of average production is "without any tangible evidence and is based on inference involving unwarranted assumptions." The Supreme Court has further held therein that "the finding is thus vitiated by an error of law." In the present matters the demand has been computed on the basis of wastage reflected in the Daily Production ....