Custom, Excise & Service Tax Tribunal
Cce & St, Ludhiana vs M/S.Gopal Steel Industries on 23 February, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. SINGLE MEMBER BENCH Appeal No.E/58023 & 58027/2013-EX(SM) [Arising out of the OIA No.177-178-CE-APPL-LDH-2013 dt.22.2.13 passed by the CCE (Appeals), Chandigarh-I) Date of Hearing/Decision: 23.2.2015 For Approval & signature: Honble Mr.Ashok Jindal, Member (Judicial) 1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? Yes CCE & ST, Ludhiana Appellant Vs. M/s.Gopal Steel Industries Respondent
M/s.Amar Ispat Udyog Appearance Shri V.P.Batra, AR- for the appellant Shri K.K.Anand, Advocate - for the respondent Ms.Priyanka Goyal, Advocate CORAM: Honble Mr.Ashok Jindal, Member (Judicial) FINAL ORDER NO.50576-50577/2015 Per Ashok Jindal :
The Revenue has filed these appeals against the impugned order passed by the Commissioner (Appeals) dropping the charge of clandestine removal against the respondents.
2. The facts of the case are that during the course of audit in the premises of M/s.Chopra Steel Strips and M/s.Jai Sidh Yogi Rolling Mills, Khanna, it was found that they were claiming burning loss of 5% and 5.88% for their final products. On the basis of audit conducted in the premises of M/s.Chopra Steel Strips and M/s.Jai Sidh Yogi Rolling Mills, Khanna, the range superintended pertaining to the respondent was asked to furnish report on burning loss claimed by the respondents. As per report of Superintendent burning loss was 4.86% of M/s.Gopal Steel Industries and 4.96% of M/s.Amar Ispat Udyog. The Revenue is of the view that in such case the burning loss should not be more than 2%. Therefore, it was alleged that the burning loss excess of 2% is not correct claimed by the respondents but they have cleared the goods clandestinely in the guise of showing excess burning loss. Therefore, the proceedings were initiated against the respondents. The respondent contested before the adjudicating authority who confirmed the demand of duty and interest and imposed penalty. Aggrieved with the said orders, the Revenue is before me.
3. Learned AR appeared on behalf of the Revenue submits that the respondent has not shown that how their machines are claimed excess burning loss in the process of manufacture of their final products which is not permissible beyond 2%. He reiterated the grounds of appeal mentioned in the appeal memo. He submits that the impugned orders dropping charge against the respondents should be set aside.
4. On the other hand, Shri K.K.Anand, learned Counsel appearing for the respondents submits that there is no basis to say that the burning loss may not be more than 2%. He further brings out in my notice the Circular dated 13.11.2011 issued by the Chief Commissioner, Chandigarh which shows that burning loss in respect of hot re-rolling mill may vary from 1-2% to 6-7% which direcst not to issue show cause notice to the manufacturers. If show cause notice is required to be issued, there should be tangible evidence against the respondents. In this case, admittedly the show cause notice were issued to the respondents on the basis of audit conducted in the factory of third party and it was alleged that the respondent have cleared the goods without invoice clandestinely under the guise of burning loss. He also submits the certificate from National Institute of Secondary Steel Technology dated 1.9.2011 certifies that the small scale steel Re-rolling mills are operating on technologies which are quite old as well as there is no automation of temperature control etc. Due to this the burning loss in these units are generally on higher side. In general scale/burning loss varies from 2 to 6-7%^ in these types of rolling mills. He drew my attention to the para wherein the Commissioner (Appeals) has examined the issue in the light of the above cited circular/ certificate and came to the conclusion that without any tangible evidence the charge against the respondent, in the show cause notice is not sustainable and has rightly dropped the demand against the respondent. Therefore, the impugned orders should be upheld.
5. Heard the parties and considered the submissions.
6. Admitted facts in this case is that the allegation of claim of excess burning loss is alleged in the show cause notice without any tangible evidence why the burning loss is not more than 2%. But Chief Commissioner, Chandigarh himself observed in the circular dated 13.11.2011 that burning loss in respect of hot re-rolling mill may vary from 1-2% to 6-7%. If the said circular would have been appreciated by the adjudicating authority, the adjudicating authority has dropped the demand against the respondents. The same thing has been examined by the Commissioner (Appeals) in the impugned orders that in such industry burning loss may extend to 6-7% on the basis of certificate from National Institute of Secondary Steel Technology dated 1.9.2011. The same is acceptable and reliable evidence in support of the respondent.
7. In the circumstances, I do not find any infirmity in the impugned orders. Accordingly, the same are upheld. The appeals filed by the Revenue are dismissed.
(Dictated & pronounced in the open court) (Ashok Jindal) Member (Judicial) mk 1