2005 (8) TMI 216

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....11A. (ii)  Imposing penalty under Rule 173Q(1) on the assessee and under Rule 209A on the Director. (iii) Ordering confiscation of Land, Building & Plant & Machinery belonging to the assessee or in their possession under Rule 173Q(2)(a) of the Central Excise Rules, 1944 and giving them an option to redeem them on payment of redemption fine of Rs. 25,000/- 1.2 Scrutiny of the 'Daily Production Report Book' showing the consumption of viz Oil RPM; Oil Consumption, percentage (%) of oil and up to date Oil Consumption and from the scrutiny of 'Operator/Daily Production Reports showing various summaries viz name of the operator, Oil RPM, POY quantity, temperature, machine stoppage time, oil consumptions were ....

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....ciency has to be factored in reality. Assumptions made to base such theoretical calculations cannot be upheld to bring home the charge of clandestine production and removal. In any case, Anti Static Oil is not the major input, the major input is POY; to manufacture all the unaccounted quantity of PTY, POY is required to be processed. No such evidence exists of unaccounted POY receipts and or use. Reliance is well placed on the Supreme Court decision in case of Oudh Sugar Mills - 1978 (2) E.L.T. (J 172) (S.C.) to not uphold this working out of clandestine production and unaccounted removal, (b) (i) The appellants plea that the Oil in question was being shifted from stores to the production area in buckets and loss pleaded on such tr....

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....e non duty paid removal, since production and removal are two distinct relative acts. If unaccounted production was being resorted by the assessee, some material indicating unaccounted production and or removal of recent origin, on date of search would have been found on the visit on information and by surprise by the officers. No such material exist. Mere unauthorised and clandestine manufacture of PTY, as alleged by Revenue, cannot be established without 'removal'. 'Unauthorized and clandestine' are words associated more with 'removal' than production. The findings of the Adjudicator are mere ipsi dixit and cannot be sustained, in absence of any corroboration of tainted removals. Since, the burden of clandestine Re....