Custom, Excise & Service Tax Tribunal
C.C.E., Raipur vs M/S. Shree Nakoda Ispat Ltd on 21 February, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing 11.02.2014
Date of Decision 21.02.2014
For Approval &Signature :
Honble Mrs. Archana Wadhwa, 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 Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No. E/49/2008 -EX[SM]
[Arising out of Order-in-Appeal No.155-CE/RPR/APPL-I/2007, dated 15.10.2007 passed by the C.C.E.(Appeals), Raipur-I]
C.C.E., Raipur Appellants
Vs.
M/s. Shree Nakoda Ispat Ltd. Respondents
Appearance Shri RK Mishra, DR - for the appellants None - for the respondent CORAM: Honble Mrs. Archana Wadhwa, Member (Judicial) Final Order No.50818/2014, dated 21.02.2014 Per Honble Mrs. Archana Wadhwa :
Being aggrieved with the order passed by the Commissioner (Appeals), Revenue has filed the present appeal. Shri RK Mishra, Ld. Departmental Representative appeared for Revenue and nobody appeared for the respondents.
2. As per facts on record, the respondents are engaged in the manufacture of sponge iron falling under Chapter Head No.7203 of the Central Excise Tariff Act, 1985. Their factory was visited by Central Excise officers on 18.12.2004, who conducted various checks and verifications. The stock of the final products was found to be tallied with the stock available in the factory. However, the officers scrutinised the daily plant operation report/processing report and arrived at a belief that the appellants were indulging in clandestine clearance of excess produced sponge iron, without reflecting the same in their statutory records.
3. In view of the above, a Show Cause Notice was issued to the respondents alleging clandestine removal of 1,283 M.T. of sponge iron without payment of duty of Rs.18,16,728/- and education cess of Rs.36,335/-. The said Show Cause Notice culminated into an order passed by the original adjudicating authority confirming the demands and imposing penalty under Section 11AC of Central Excise Act, 1944.
4. On appeal against the above, Commissioner (Appeals) set aside the order of the original adjudicating authority and allowed the appeal. Hence, the present appeal by the Revenue.
5. On going through the impugned order of the Commissioner (Appeals), I find that he has taken into consideration the fact that there was no stock variation of sponge iron, as reflected in the panchnama drawn on the date of visit of the officers. If the assessee was indulging in clandestine activities, there should have been some shortages or excess. He further observed that the Revenue case is purely based upon presumptions and inadmissible evidences. The Director of the respondent company Shri Sanjay Goel, in his statement recorded on 18.12.2004 has clearly deposed that the daily plant operation report for the period 16.08.2004 to 16.12.2004 were prepared by the shift officials as per the production floor which depicts the consumption of the raw-materials and production of tentative finished goods and other technical details; the percentage yield of sponge iron is about 50 to 55 of the sized iron ore. Similarly, he has taken note of the statement of Shri Subrata Chakraborty, DGM (Process) of the respondent company dated 07.03.2005, who deposed that the figures entered in their process report were estimated figures as per the availability of raw materials and planned production, but it may not be the exact production of the plant available for dispatch as they have nagging problem of leakage form cooler inlet which resulting loss of metalisation of sponge iron that bring down metalisation below 50% which is not at all marketable and usable for further use for production of steel; their loss is in the tune of approx. 15 to 20% per day which has not been taken in their process report.
Accordingly, the appellate authority observed that simply relying upon the documents maintained by the production staff which are also contested by the appellant, the allegations of clandestine removal are based on illusion, non-cogent premises and by taking into account various decisions of the Tribunal, he set aside the confirmation.
6. On going through the impugned order, I find that the entire case of the Revenue is based upon some production records maintained by the respondents. The respondents have explained the purpose for maintenance of such records as also the fact that they cannot be taken as the final production in as much as the percentage yield differs on day-to-day basis and the plant production can never be achieved. Apart from the said production records, which are being contested by the respondents, there is virtually no other evidences on record indicating any excess manufacture of final product or the clandestine removal of the same. The appellate authority has rightly observed that the factum of non-variation of the stock on the date of visit of the offers carry a lot of weightage to support the respondents stand that they were not indulging in any clandestine activity.
7. In the absence of any other evidence to reflect upon the clandestine activity of the respondents, I fully agree with the findings of the commissioner (Appeals) that the demands cannot be confirmed against the respondents. Accordingly, I reject the appeal filed by the Revenue.
Pronounced on 21.02.2014 (Archana Wadhwa) Member (Judicial) SSK -2-