M/s. Amar Enterprises, Shri Sanwar Mai Goyal, Shri Amar Chand Sharma Versus CGST & CE, Alwar
Central Excise
2018 (9) TMI 85 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 5-7-2018
Excise Appeal No. 51695 – 51697 of 2017 – A/52626-52628/2018-EX[DB]
Central Excise
Mr. Anil Choudhary, Member (Judicial) And Mr. C L Mahar, Member (Technical)
Shri Prem Ranjan, Advocate for the Appellants
Ms Tamana Aalam, AR for the Respondent
ORDER
Per: C L Mahar:
The brief facts of the matter are that the appellants are a 100% EOU engaged in manufacture of copper ingots from various kinds of copper scraps such as mixed copper cable scrap, mixed copper scrap, copper scrap, MS scrap, rubber picuks, etc. The appellants, after segregation of the scraps retrieves copper from the same and the copper scrap so obtained is melted and from it copper ingots are manufactured. The department has entertained a doubt that appellants are under-reporting the recovery of copper from coppe
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uty amounting to Rs. 1,20,19,706/- was confirmed and equal amount of penalty on the appellant was imposed under Section 11AC. Personal penalty of Rs. 10 lakh was imposed on Shri Sanwar Mai Goyal, partner of the appellant.
3. Against the above mentioned order-in-original, the appellant in his first round of litigation had come before this Tribunal wherein vide Final Order No. 55292 -55294/2016 dated 16.11.2016, the Tribunal has remanded the case for denovo adjudication with the following directions:-
“7. In the totality of the facts and circumstances of the case, we are of the view that in the instant case, no comparative study of like manufacturing units was considered by the department. Similarly, the appellant to support their contention has not brought on record any such studies pertaining to the yield from the consignments of the scrap. A comparative study of like factories on this subject matter is required to be considered for coming to the right decision. Hence, we set aside t
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king the re-adjudication of the matter. It is seen from the impugned order-in-original that no such comparative study as ordered by this Tribunal has been undertaken before re-adjudication of the matter. The adjudicating authority has held that they are not in a position to find any like units or factories working in their jurisdiction where the comparative study can be made. It has also been mentioned in the impugned order that after 13 years, there is no data available, therefore, no comparative duty can be carried out at this stage. It has also been mentioned that –
19.2 “……..Any comparative study of Industries has to be done in relevance to time period involved. After 13 years there is no data available, therefore, no comparative study can be carried out at this stage. An apple can be compared with an apple and orange can be compared with orange but an apple cannot be compared with orange. Besides, in this case, personal hearing was held on 18.5.2017 but as on date the assesse
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d and clandestine clearance of copper ingots. It has further been contended that the Central Excise Officers supervised the activities of segregation of copper, MS scrap, rubber picuks, dust and other metals (viz. lead aluminous etc. for the recovery of copper scrap, from mixed copper cable scrap / mixed copper scrap / copper scrap in respect of 16 consignments weighing 300.825 MT imported vide 5 Bills of entries from 10.9.2004 to 8.11.2004. The Central Excise officers also examined the raw material issue slips and plant segregation challan which revealed that average copper recovery from mixed copper cable scrap was 31.8% for the said 5 Bills of Entry.
7. We have heard the learned DR who has reiterated the findings given in the order-in-original.
8. We have heard the rival contentions. We are of the view that the while asking for the comparative study, this Tribunal had expected that the Commissioner would not confine himself to his own jurisdiction, he could have done the exercise
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e copper ingots over and above what was declared by them in their statutory records. The law is fully settled that in every case of alleged clandestine manufacture and clearance, the onus is on the revenue to prove what it alleges with positive and concrete evidences. We find that average recovery of copper from five consignments of copper scrap cannot form concrete evidence to demand duty over and above the declared quantities of clearances of copper ingots. The department should have gathered some more precise evidences to prove unrecorded manufacture of copper ingots and sale of same. We find that they have not even made any efforts in this direction. We note that since a huge quantity of copper ingots cannot manufactured and sold without leaving some traces of evidences but no efforts have been made to prove the same.
10. If there were excess sale of copper ingots other than what is provided in the statutory records of the appellant-assessee then some investigations should have be
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hewson, Professor, Yale University, prepared with cooperation of the American Zinc Institute; and the Scrap Specifications Circular issued by Institute of Scrap Recycling Industries, Inc. saying that the conclusions mentioned in the show cause notice and in the order-in-original confirming the suppressed production and duty is not correct, considering the varieties of zinc scrap like “Saves, Scabs, Scribe” and so on used by the appellant.
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
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ces 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.
6.3 Consequently, we are of the considered view that the department has not discharged its burden of conclusively proving the case of suppressed production and clandestine clearance by the appellants. In this regard we seek support from Hon'ble Allahabad High Court's decision in the case of Continental Cement Company v. Union of India – 2014 (309) E.L.T. 411 (All.) and Supreme Court's decision in the case of Oudh Sugar Mills Ltd. v. Union of India – 1978 (2) E.L.T. (J172) (S.C.) and CESTAT's in the case of Punalur Paper Mills Ltd. v. CCE – Vide Final Order Nos. 996-997/2008, dated 26-8-2008 [2009 (244) E.L.T. 204 (Tribunal)]. The Hon'ble High Court in the case of Continental Cement Company (supra) has inter alia observed as under:
13. …….to prove the allegation of clandestine sa
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