ORDER
M.P. Bohra, Member (J)
1. Heard Shri A. Raha, learned S.D.R. for the appellant-Commissioner and Shri B.N. Chattopadhyay, learned Consultant for the respondents.
2. Shri Raha, learned S.D.R. submits that the observations of the Commissioner (Appeals) at least on two counts, are hardly tenable. The Commissioner (Appeals) accepted the respondent company’s contention that the “Private Records” showed inflated figures for production with a view to avail loan from the bank, and they did not show the correct figures of production. The respondent-company has vouched for authenticity and correctness of both the figures at different fora. So, it cannot be said that the production figures shown in “RG-I Register” are correct and the figures entered in the “Production Register for Bank”, are not correct.
2.1. The most clinching evidence is the pattern of power consumption. As per the production norms furnished by the assessee to the adjudicating authority, 590 units of electricity are required for the manufacture of 1 M.T. of final product, whereas the assessee has shown a figure of 1000 units of electricity for production of 1 M.T. of their final product. The assessee has tried to show it as extra energy consumption to the extent of 25% and the rest attributed to the old age of machine and lack of experience of the operator. He, therefore, submits that the ‘Production Figures for Bank’ are not strictly private to that extent. It forms a basis for legal transaction. Therefore, Shri Raha, learned S.D.R. submits that the two appeals filed by the appellant-Commissioner, may be allowed and the impugned Order be set aside.
3. Learned Consultant, Shri Chattopadhyay for the respondents, supports the arguments raised in the Cross-Objection filed by the assessee, as also the Order of the Commissioner (Appeals). He submits that there was neither any investigation on the point of consumption of electricity nor was there any evidence produced for clandestine manufacture and removal of the goods in question. In order to prove that the goods had been manufactured and removed clandestinely, a solid, valid and clinching evidence is necessary. Without such evidence, clandestine manufacture of the goods and removal thereof, from the factory, cannot be proved. In this context, he relies upon the following decisions :
“(a) 2002 (148) E.L.T. 101 (Tribunal) confirmed by the Supreme Court [2003 (153) E.L.T. A298];
(b)
(c)
(d)
(e) 1996 (83) E.L.T. 347 (Tribunal) (Sic)
(f) ”
Shri Chattopadhyay learned Consultant, therefore, submits that the appeals filed by the Revenue may be dismissed.
4. I have perused the records along with the impugned Order. The Commissioner (Appeals) has observed in his Order as follows :
“Further, admittedly the appellant unit was running and its consumption pattern of electricity was not something that the department unearthed on the date of search. If at all the electricity consumption ratio to production is alleged to have been misdeclared by the appellant, it is for the department to prove the contrary with cogent evidence on record. I find that it is not legal on the part of the lower authority to simply ward off consumption ratio declared by the appellant with the observation that it was overloaded. Similarly, the lower authority had no basis to conclude that the raw materials procured by the appellant from the local market could remain unaccounted and that it cannot be said that the appellant had produced all their records for verification by the preventive officials. It is settled law that charge of clandestine removal cannot be based on presumption and consumption. Rather, such a charge must be supported by cogent, concrete and tangible evidence. I find that there is no evidence on record to corroborate the private record admittedly maintained by the appellant and also no material on record to reject the submissions of the appellant in defence. In view of the above, the charge of clandestine removal fails.”
I find that the above Order of the Commissioner (Appeals) is based on the decisions rendered by this Tribunal in various cases.
4.1 In present case, I find that the Department has not adduced any evidence to substantiate the charge of clandestine removal. There is no iota of evidence that the assessee has purchased any excess raw materials to manufacture any excess ingots in their factory over and above what has been required in their Books of Accounts. The contention of the Deputy Commissioner that the respondent-company could have purchased the raw materials from the market and might have used the same in the manufacture of ingots, was absolutely based on assumption and presumption. It is absolutely a settled principle of law that on the basis of presumption, no adverse conclusion is possible. The onus is on the Department to prove the clandestine manufacture and removal of the goods from the factory. There was no evidence of clandestine manufacture and removal of the goods from the factory. Only some rough note-books were found by the Investigating Officers, which did not reflect the actual production of their factory. The Department has also failed to prove as to whether there was sufficient evidence to prove that power consumption per tonne was based on evidence or records seized from the appellants or was based on any experiment conducted in the premises of the respondent-company. I find in the present case that neither there was a norm of consumption of power nor was there any evidence in the form of private records seized, nor was there any evidence which was based on any norm fixed by the Department under Rule 173E. In the absence of such a record or proof, it cannot be said that any excess production had taken place in the factory during the period in question. Similar view was taken in the case of Hans Castings Private Limited v. Collector of Central Excise, Kanpur .
4.2 In view of the above discussions, I do not find any force in the appeals filed by the appellant herein. Consequently, I dismiss the same. The Cross-Objection filed by the respondent-company stands disposed of, accordingly.
(Pronounced on 8-9-2005)