Custom, Excise & Service Tax Tribunal
Aryan Ispat And Power Pvt Ltd vs Bhubaneshwar-Ii on 17 November, 2023
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
KOLKATA
REGIONAL BENCH - COURT NO.2
Excise Appeal No. 70077 of 2013
(Arising out of Order-in-Original No. CCE/BBSR-II/NO-43/COMMISSIONER/2012
dated 14.11.2012 passed by Commissioner of Central, Customs & Service Tax,
Bhubaneswar-II)
M/s. Aryan Ispat
and Power Pvt. Ltd.
(Vill.-Bomaloi, Tehsil-Rengali, Dist.-Sambalpur (Orissa),
768212)
Appellant
VERSUS
Commr. of Central Excise, Customs & Service Tax,
Bhubaneswar-II
(C. R. Building, Rajaswa Vihar, Bhubaneswar-751007, Odisha)
Respondent
With Excise Appeal No. 70078 of 2013 (Arising out of Order-in-Original No. CCE/BBSR-II/NO-43/COMMISSIONER/2012 dated 14.11.2012 passed by Commissioner of Central, Customs & Service Tax, Bhubaneswar-II) Sri G. S. Garcha, Executive Director M/s Aryan Ispat and Power Pvt Ltd., (Vill.-Bomaloi, Tehsil-Rengali, Dist. Sambalpur (Orissa), Pin-768212) Appellant VERSUS Commr. of Central Excise, Customs & Service Tax, Bhubaneswar-II (C. R. Building, Rajaswa Vihar, Bhubaneswar-751007, Odisha) Respondent And Excise Appeal No. 70079 of 2013 (Arising out of Order-in-Original No. CCE/BBSR-II/NO-43/COMMISSIONER/2012 dated 14.11.2012 passed by Commissioner of Central, Customs & Service Tax, Bhubaneswar-II) Sri B K Chandrakar, M/s Aryan Ispat And Power Pvt. Ltd., (Vill.-Bomaloi, Tehsil-Rengali, Dist. Sambalpur (Orissa), Pin-768212) 2 E/70077-70079/2013 Appellant VERSUS Commr. of Central Excise, Customs & Service Tax, Bhubaneswar-II (C. R. Building, Rajaswa Vihar, Bhubaneswar-751007, Odisha) Respondent APPEARANCE :
Mr. K. Kurmy & D. Dutta, both Advocate for the Appellant Mr. P. K. Ghosh, Authorized Representative for the Respondent CORAM:
HON'BLE MR. R. MURALIDHAR, MEMBER (JUDICIAL) HON'BLE MR. K. ANPAZHAKAN, MEMBER (TECHNICAL) FINAL ORDER NO.77490-77492/2023 Date of Hearing : 17 October 2023 Date of Pronouncement: 17/11/2023 PER R. MURALIDHAR:
The Appellant is manufacturer of Sponge Iron falling under CET
72. The Central Excise officials have visited their unit on 04/11/2009.
They conducted detailed investigation and seized various documents and recorded Statements under Section 14 of CEA, 1944. Subsequently, the Show Cause Notice was issued on 18/02/2011 for the period July 2006 to November 2009 on the ground that based on the per hour feed rate of Iron Ore, the Appellant has consumed more iron ore. This has resulted in lower declaration of the produced sponge iron to the extent of 11089.730 MT, during the period July 2006 to November 2009. The Department alleged that this undeclared manufactured sponge iron has been clandestinely cleared without payment of Excise Duty to the extent of Rs.2,59,58,417/-. The Adjudicating Authority, after the due process has confirmed the demand. Being aggrieved, the Appellant has filed the present Appeal before the Tribunal.
2. The Learned Counsel appearing on behalf of the Appellant challenged the impugned order on the following grounds:-
(i) No duty can be demanded on "Estimated Production" but can be made only on "Actual production". Charge of clandestine 3 E/70077-70079/2013 production and removal cannot be sustained on the basis of theoretical calculation.
(ii) Without consumption of other major Raw Material i.e. Coal and Dolomite Production of Sponge Iron is technologically impossible.
(iii) There is no tangible, cogent, corroborative evidence in support of charge of clandestine production/removal of finished goods. Charge of clandestine removal cannot be sustained on the basis of private records, loose sheets.
(iv) The statement recorded from different persons which are relied on have become irrelevant due to non-compliance of Section 9 D of the Central Excise Act, 1944 and hence not admissible into evidence.
(V) The so called "Process Log Book" is extraneous material.
3. The Appellant submits that from the Annexure (c) of the Show Cause Notice, it can be seen that the quantification of the alleged clandestine manufacture has been arrived at "estimated production basis". For a formula of this estimated production, they have adopted the formula which is not any recognized formula under the Central Excise Act or any other law. From this statement, it can also be seen that the Department has assumed FE(T) in the Iron Ore as 62.7% consistently, which cannot be the case since this percentage would differ from lot to lot. The entire quantification is based on the assumptions and presumptions and the calculation attached to arrive at the estimated production which is legally not sustainable. The Appellant relies on the following case Laws:-
(i) CCE Vs. Mittal Pigment Pvt. Ltd. reported in 2018 (16) GSTL 41 (Raj.)
(ii) Mittal Pigment Pvt. Ltd. Vs. CCE reported in 2018 (360) ELT 157 (Tri. Del.)
(iii) Nav Karnataka Steels Pvt. Ltd. Vs. CCE reported in 2008 (225) ELT 454 (Tri.-Bang.) 4 E/70077-70079/2013
4. In these cases, it has been held that the estimated production cannot be quantified based on the consumption of electricity or any particular raw material. It has also been held that unless such workings are corroborated with other evidence towards purchase, transportation, sales and cash receipt/cash payment details, the calculations on its own cannot be legally sustained.
5. The Learned Advocate submits that the manufacture of 1 MT of Sponge Iron requires 1.67 MT to 2 MT of Iron Ore, 2 MT of Coal and 100 kg of dolomite. The Department has not brought out that any details of excess consumption of coal and dolomite which also would be required for producing the alleged excess manufacture of Sponge Iron. The Department's contention is that the alleged excess consumed iron ore has resulted in clandestine excess manufacture of sponge iron. In this case, in order to allege clandestine manufacture and clearance wherein huge quantity of iron ore are involved, coal and dolomite and the finished goods sponge iron transportation would have to be undertaken by engaging hundreds of vehicles. No evidence whatsoever has been brought in that such vehicles were used either for procuring the input clandestinely or for clearance of the finished goods clandestinely. It is also assumed that iron ore is directly fed into the Kiln through the weigh feeder whereas the Iron Ore is fed to the Conveyor Belt through the weigh feeder which carries the Iron Ore to Iron Ore storage hooper from where Iron Ore is charged into the Kiln through another weigh feeder and therefore set point/flow rate of the weigh feeder fitted with the conveyor is irrelevant for determining consumption of Iron Ore. So far as the extra electricity consumed is concerned, the Appellant has set up of 350 TPD Kiln capacity. They have also used the electricity for the Captive Power Plant and lighting different areas of the factory premises. These important consumptions have not been considered by the Department and the entire electricity consumption has been attributed to manufacture of sponge iron alone, which is grossly erroneous.
5E/70077-70079/2013
6. The Learned Counsel also submits that there is no evidence brought in towards the alleged excess purchase and payment of the raw materials like Iron ore, Coal and Dolomite. Similarly even in this case of alleged sale of the finished goods, no evidence whatsoever has been brought in with respect of receipt of cash payment for such huge quantity of alleged sale of 11089.730 MT of Sponge Iron. He further submits that the statement recorded which are relied upon are not admissible as evidence in view of non-compliance of the procedure specified under Section 9D of the Central Excise Act, 1944. As a matter of fact, Mr. B. K. Chandrakar who has recorded his statement on 18/01/2010 has retracted his statement on 24/01/2010. In view of this, his statement cannot be admitted as evidence. Accordingly, it is submitted that the confirmed demand is required to be set aside on merits.
7. The Learned Counsel submits that the Show Cause Notice has been issued on 18/02/2011 for the alleged clandestine removal during the period July 2006 to November 2009. The data towards quantification of alleged clandestine manufacture and removal has been compiled by the Department based on assumptions and presumptions and based on estimated production as per the calculation worked out by them which has no legal backing. The Department officials have visited the unit on 04/11/2009 and all the statements were recorded immediately afterwards. As the Show Cause Notice was issued on 18/02/2011 i.e. after more than one year 4 moths from the date of visit of the officials to the unit, the entire confirmed demand is time barred. Accordingly, he prays that the impugned OIO may be set aside even on account of limitation.
8. The Learned AR appearing on behalf of the Revenue submits that the Central Excise officials visited their unit and seized several documents and have recorded the statements by various officials to corroborate that clandestine manufacture and clandestine removal has taken place. He submits that the estimated production has been calculated as per the formula which was being adopted by the 6 E/70077-70079/2013 Appellant. Further, he submits that the Department was not required to precisely arrive at the conclusion by bringing all evidence, since it is well known that in case of clandestine removal, no records towards purchase as well as vehicle movement etc. are kept. He submits that enough evidence has been brought in by the Department to confirm the demand. So far as the limitation issue raised by the Appellant is concerned, the entire matter of clandestine manufacture and clearance has come into light only because of the visit of Central Excise officials to the factory premises of the Appellant and on account of seizure of various documents from their premises. If they had not undertaken such detailed investigation, the clandestine manufacture and clearance could not have come into light. Therefore, he justifies the confirmed demand in respect of the extended period. He prays that the present Appeal may be dismissed.
9. Heard both sides and perused the Appeal papers and documentary evidence placed along with the case law cited.
10. From the Show Cause Notice and the OIO passed, it gets clarified that the demand has been made towards excess production of 11089.730 MT of Sponge Iron during the period July 2006 to November 2009 solely based on the formula adopted by the Department to arrive at the estimated production of iron ore to this extent. While the purchase quantity of iron ore has been taken into account and the electricity consumption has been considered, as pointed out by the Appellant, the manufacture of sponge iron also requires two other important raw materials/consumable viz., Coal & dolomite. In the entire investigation, the Department has not brought out any evidence towards excess procurement of coal and dolomites. Since the coal is bought from the coal mine, proper records were kept both by the vendor as well as by the receiver. Such huge quantity of coal could not have been bought by way of cash. There is also no evidence towards deployment and movement of hundreds of vehicles to transport such huge quantity of coal and dolomite. Further, it is seen that no investigation has been taken up towards alleged sale of 7 E/70077-70079/2013 the huge quantity of Sponge Iron. No statements have recorded from any of the alleged purchasers of the finished goods. There is no allegation about recovery of any private records towards cash receipt/cash payment for the alleged clandestine transactions. In case of allegations of clandestine manufacture/sales, it is essential for the Department to bring in as much corroborative evidence as possible. In this case, it is seen that the Department has solely relied on the consumption of iron ore which is only one of the raw materials to arrive at the estimated production quantity. Even the Fe (T) content of iron ore has been taken at a consistent level of 62.7% which would not be possible when lot to lot iron ore FE (T) content is checked. The variations which are likely to occur in such lots have not been taken into consideration.
11. We find that the statement recorded by Mr. B K Chandrakar, one of the Appellants herein on 18/01/2010 was retracted by him on 24/01/2010. Even in case of other persons who have recorded the statement, the procedure specified under Section 9D of CEA, 1944 has not been followed.
12. The Punjab and Haryana High Court in the case of G. Tech Industry Vs. Union of India- 2016 (339) ELT (209) (P & H) as given elaborate findings on section 9(D) as under:-
4. In view of the fact that the case of the petitioner is essentially premised on Section 9D of the Central Excise Act, 1944, it would be appropriate to reproduce the said provision, in extenso, thus :
"9D. Relevancy of statements under certain circumstances. - (1) A statement made and signed by a person before any Central Excise Officer of a gazetted rank during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, -
(a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the Court considers unreasonable; or 8 E/70077-70079/2013
(b) when the person who made the statement is examined as a witness in the case before the Court and the Court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice.
(2) The provision of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a Court, as they apply in relation to a proceeding before a Court."
5. A plain reading of sub-section (1) of Section 9D of the Act makes it clear that clauses (a) and (b) of the said sub-section set out the circumstances in which a statement, made and signed by a person before the Central Excise Officer of a gazetted rank, during the course of inquiry or proceeding under the Act, shall be relevant, for the purpose of proving the truth of the facts contained therein.
6. Section 9D of the Act came in from detailed consideration and examination, by the Delhi High Court, in J.&K. Cigarettes Ltd. v. CCE, 2009 (242) E.L.T. 189 (Del.) = 2011 (22) S.T.R. 225 (Del.). Para 12 of the said decision clearly holds that by virtue of sub-section (2) of Section 9D, the provisions of sub-section (1) thereof would extend to adjudication proceedings as well.
7. There can, therefore, be no doubt about the legal position that the procedure prescribed in sub-section (1) of Section 9D is required to be scrupulously followed, as much in adjudication proceedings as in criminal proceedings relating to prosecution.
8. As already noticed herein above, sub-section (1) of Section 9D sets out the circumstances in which a statement, made and signed before a Gazetted Central Excise Officer, shall be relevant for the purpose of proving the truth of the facts contained therein. If these circumstances are absent, the statement, which has been made during inquiry/investigation, before a Gazetted Central Excise Officer, cannot be treated as relevant for the purpose of proving the facts contained therein. In other words, in the absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement, recorded before a Gazetted Central Excise Officer, has to be proved by evidence other than the statement itself. The evidentiary value of the statement, insofar as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1).
9. The consequence would be that, in the absence of the circumstances specified in Section 9D(1), if the adjudicating authority relies on the statement, recorded during investigation in Central 9 E/70077-70079/2013 Excise, as evidence of the truth of the facts contained in the said statement, it has to be held that the adjudicating authority has relied on irrelevant material. Such reliance would, therefore, be vitiated in law and on facts.
14. There is no justification for jettisoning this procedure, statutorily prescribed by plenary parliamentary legislation for admitting, into evidence, a statement recorded before the Gazetted Central Excise officer, which does not suffer from the handicaps contemplated by clause (a) of Section 9D(1) of the Act. The use of the word "shall" in Section 9D(1), makes it clear that, the provisions contemplated in the sub-section are mandatory. Indeed, as they pertain to conferment of admissibility to oral evidence they would, even otherwise, have to be recorded as mandatory.
15. The rationale behind the above precaution contained in clause
(b) of Section 9D(1) is obvious. The statement, recorded during inquiry/investigation, by the Gazetted Central Excise officer, has every chance of having been recorded under coercion or compulsion. It is a matter of common knowledge that, on many occasions, the DRI/DGCEI resorts to compulsion in order to extract confessional statements. It is obviously in order to neutralize this possibility that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned. .[Emphasis supplied]
13. In the case of Mittal Pigment Pvt. Ltd. Vs. CCE [2018 (360) ELT 157 (Tr.-Del.)], the Tribunal has held as under:-
6.1 Further the department has not gone beyond the approximation of yield which they have shown as 70 to 84% in col. 3 of Annexure-A attached to the show cause notice and average yield overall had been shown as 77.60% which has been made the basis for issuance of the show cause notice (SCN) as well as for confirming the duty of Central Excise by the impugned order dated 19-5-2009. The department confirmed the duty demand along with interest for the period of five years alleging suppression of clandestine removal of the final product and also imposed penalty mainly based on the production approximation and on the statement of Director of the unit, Shri Agarwal, who is one of the appellants in this case.
6.2 The department has not gone beyond the approximation and the statement of Shri Agarwal. Any prudent person would not so conclude on extra production by approximation and by a mere statement of the Director of the company. Unless there are further corroborations in 10 E/70077-70079/2013 the form of documentary evidences, which could be like despatch details for the production, receipt details of the said material, transactions of the sale money, transportation details of such goods, details of additional consumption of electricity for such suppressed production a prudent individual would not agree with the present conclusions of the Revenue. There is nothing on record from the Revenue side to come to a reasonable conclusion to say that there has been preponderance of probability of such suppressed production on the part of the appellant. The evidences in the form of approximation and averaging production as 77.6% and one statement of Shri Agarwal, Director of the appellant company cannot be called a prudent conclusion of the production estimate.
7. Considering above discussions and the case laws cited above, we conclude that the Revenue has failed to reasonably prove suppressed production and clandestine clearance on the part of the appellants.
Consequently, the impugned order in respect of confirmation of duty for alleged suppressed production, and imposition of fine and penalty on the appellant No. 1 and imposition of personal penalty of Rs. 40 lakhs on Shri Agarwal who is appellant No. 2 are hereby set aside. The appellants will get the relief accordingly.[Emphasis supplied]
14. The above Tribunal decision was affirmed by Rajasthan High Court as reported in CCE Vs. Mittal Pigment Pvt. Ltd. 2018 (16) GSTL 41 (Raj.)].
15. In the case of A. R. Shanmugasundaram Vs. CCE [2016 (333) E LT 158 (Tri. Chennai)], the Tribunal has held as under:-
14. In spite of specific directions of this Tribunal, to establish clear evidences on the receipt of LAB by the appellants, no evidence has been brought out in the de novo order except relying the statements of persons of SWC. The period involved in the present case relates to April, 89 to February, 95. It is pertinent to see that the appellants are registered with central excise and being a chemical industry the adjudicating authority ought to give a clear cut findings on the manufacture of final products and clandestine clearance. Further it is vital that both the inputs LAB and sulphuric Acid and the final product that is Acid slurry are highly corrosive chemical requires safety for transportation and storage and use. The Revenue tried to make out the entire case based on the SWC records for supply of LAB, various fictitious firms etc. The onus is on the department to establish the supply of LAB by SWC in various fictitious names pertaining to the appellants. Further, we find that mere single seizure of 449 kgs. of acid slurry valued Rs. 16000/- during the transit cannot be a proof for the Revenue to arrive conclusion that the huge quantity of Acid slurry 11 E/70077-70079/2013 was manufactured and cleared clandestinely. The seizure of acid slurry found at M/s. Baby Star Soap Works, cannot be expanded to the total quantity of 1366.686 M.Ts alleged to have been manufactured by the appellants clandestinely.
15. Further, we find that the adjudicating authority has computed the quantity and value purely on mathematical formula and worked out the total quantity of acid slurry by adopting the ratio of raw materials LAB and sulphuric acid purely based on the alleged quantity of LAB received by the appellants from SWC and not supported with any evidence. As regards the payments made to three employees of SWC, the appellants claimed that this was paid for the expenses.
Regarding payment of Rs. 11 lakhs made by Fintex Chemicals to TNPL, we find that there is no finding to link the said payments to supply of LAB to the appellants and mere statements that they are related and controlled by the appellants, is not an evidence to hold that appellants revived LAB.
16. It is pertinent to state that in order to manufacture acid slurry, use of second raw material, i.e., sulphuric acid oleum is equally important to establish illicit manufacture of finished goods of such a huge quantity, as alleged in the findings. As rightly contented by the appellants if they have to manufacture such a huge quantity of acid slurry definitely it requires huge storage capacity for LAB, finished product and spent acid, which is a by-product as the same cannot be thrown out without clearing. In this regard, the Tribunal's coordinate Bench in the case of Mahesh Silk Mills v. CCE, Mumbai reported in 2014 (304) E.L.T. 703 (Tri.-Ahmd.) clearly held that merely based on the statements and private records, the demand of excise duty on clandestine removal cannot be sustainable without corroborative evidence. The relevant portion of the said decision is reproduced as under :-
"6. It is observed from the records that the total demand of duty of Rs. 30,18,378/- in the case has been raised mainly on the basis of figures taken from the diary recovered from the factory premises of Mahesh Silk Mills on 19/20-10-1955. While recovery of the impugned from the factory premises of Mahesh Silk Mills is not disputed by the appellant but no one from appellant's side has admitted that the diary belonged to the appellant. Nor the contents of the diary were admitted by any one from the appellant's side. The scribe of the said diary has not been identified by the Revenue for ascertaining the ground realities. Only one trader - Chandan Prints, who is one of the 12 E/70077-70079/2013 47 traders mentioned in the said diary, initially admitted to have received 24,555 L. Meters of processed man-made fabrics, involving excise duty of Rs. 33,957/- from Mahesh Silk Mills against 24,555 L. Meters of grey Man-Made Fabrics sent to Mahesh Silk Mills on 29-3-1994 and 5-8-1993. However, M/s. Chandan Prints had retracted its statement during the course of adjudication. The statements of the remaining 46 traders have not been placed on record by the Revenue to prove that the remaining entries recorded in the diary also related to clandestine manufacture and removal of processed man-made fabric. There is no corroborative evidence of excess consumption of electricity, colours, dyes, chemicals, etc., by the appellant. There is also no evidence of transportation of processed man-made fabrics from the appellant's factory or any instance where clandestinely removed goods were seized by the revenue. Cross-examination of the third party witness was also not provided to the appellants.
8. Similarly, in the matter of Nova Petrochemicals v. CCE, Ahmedabad-II, this Tribunal in its Final Order Nos. A/11207- 11219/2013, dated 26-9-2013 this bench has held as under in Para 40 :
"After having very carefully considered the law laid down by this Tribunal in the matter of clandestine manufacture and clearance, and the submissions made before us, it is clear that the law is well settled that, in cases of clandestine manufacture and clearances, certain fundamental criteria have to be established by Revenues which mainly are the following :
(i) There should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions;
(ii) Evidence in support thereof should be of :
(a) raw materials, in excess of that contained as per the statutory records;
(b) Instances of actual removal of unaccounted finished goods (not inferential or assumed) from the factory without payment of duty.
(c) Discovery of such finished goods outside the factory 13 E/70077-70079/2013
(d) Instances of sales of such goods to identified parties.
(e) receipt of sale proceeds, whether by cheque o by cash, of such goods by the manufacturers or persons authorized by him;
(f) use of electricity for in excess of what is necessary for manufacture of goods otherwise manufactured and validity cleared on payment of duty
(g) statements of buyers with some details of illicit manufacture and clearance;
(h) proof of actual transportation of goods, cleared without payment of duty
(i) links between the document recovered during the search and activities being carried on in the factory of production; etc.
17. In the present case, in spite of clear directions by the Tribunal by giving an opportunity to the adjudicating authority to bring out all the evidences including the electricity consumption, adjudicating authority failed to bring out any material evidence in support of supply of LAB by SWC to the appellants, no evidence for such a huge amount of manufacturing activity, or no evidence of any payments for sale of finished goods clandestinely removed and no evidence on removal of spent acid. We also find that no attempt has been made to obtain the documents and records from TNPL, which is crucial for sale of LAB instead the LA had only relied on the statements and records of SWC who is a sole selling agent of TNPL.
18. In view of the foregoing discussions, we are of the considered view that the entire demand of clandestine removal of acid slurry has been made based on assumption and theoretical calculations by arriving taking notional quantity of LAB. Accordingly, we hold that the demand is not sustainable and entire demand is liable to be set aside. The confiscation of the seized goods of 449 kgs of Acid slurry and imposition of fine ordered by the adjudicating authority is upheld. The excise duty demanded in the impugned order is set aside and the appeal is allowed to that extent.[Emphasis supplied] 14 E/70077-70079/2013
16. In the case of CCE Vs. R. A. Casting Pvt. Ltd. [2011 (269) ELT 337 (All.), the Tribunal has held as under:-
2. The Respondent Nos. 1 and 2 were involved in the manufacturing of MS ingots and in respect thereof had maintained the books of account as provided under the Central Excise Rules and were furnishing the returns and paying the central excise duties. The Superintendent issued the show cause notices dated 1-12-2006 asking the respondent to show cause why the demand towards central excise duty may not be confirmed for the period from 2001-02 to 2004-05 by invoking the proviso to Section 11A(1) of the Act and why the penalty should not be imposed under Rule 25(1) of the Central Excise Rules, 2002 read with Section 11AC of the Act. Various allegations have been made in the show cause notices and from the perusal of the show cause notices it appears that the excess production has been estimated on the basis of the higher electricity consumption. The respondents filed their reply. The Commissioner of Central Excise, Meerut-I, vide its order dated 30-7-2007 has confirmed the demand against the respondent nos. 1 and 2 and also imposed the penalty on the respondent nos. 1 and 2 and on other respondents alleged to have been involved in the clandestine removal of the goods.
5. On consideration of the aforesaid findings, we are of the view that the findings of the Tribunal are based on the material on record and they cannot be said to be without any material and perverse. We find that the Revenue has invoked the proviso to Section 11A(1) of the Act but no case has been made out in the show cause notices or in the adjudication order that there were any mis-statement, suppression of fact or fraud on the part of the respondents. No substantial question of law arises from the order of the Tribunal.[Emphasis supplied]
17. The ratio of the cited case law are squarely applicable to the facts of the present case. In the absence of the corroborative evidence, particularly taking into account that the entire estimated production has been arrived at based on certain formula with no 15 E/70077-70079/2013 statutory backing, we do not find any merits in the OIO passed by the Adjudicating Authority. Accordingly, we set aside the impugned order on merits.
18. We also find force in the arguments of the Appellant that the Show Cause Notice has been issued after 1 years 4 months from the date of receipt of the officials to the Appellant's factory. There is no documentary evidence placed that such delay was caused by any non-cooperative attitude of the Appellant. Therefore, we hold that the confirmed demand is required to be set aside even on account of limitation also. We do so.
19. Thus, the Appeal is allowed both on merits as well as on account of limitation. The Appellant would be eligible for consequential relief, if any, as per law.
(Order pronounced in the open court on 17/11/2023) Sd/-
(R. Muralidhar) Member (Judicial) Sd/-
(K. Anpazhakan) Member (Technical) Pooja