ORDER
K.D. Mankar, Member (T)
1. The appellants are challenging the order of the lower authorities whereby a demand of duty has been confirmed against them to the tune of Rs. 1,04,027/-. The demand has been raised on the ground that, the appellants have shown higher amount of processing loss while converting the brass scrap for manufacture of billets, which were again captively consumed in the manufacture of circles which were trimmed to produce trimmed circles and the latter were subsequently cleared for manufacture of utensils. In the operative part of the order-in-original, the Assistant Commissioner has held as under :-
“I find the party guilty of the fifth allegation inasmuch as they have claimed melting and processing loss @ 5.8% which is unduly high. There is no reason why trade opinion that firmly holds that such loss varies between 1% and 1.5% should not be relied upon. But, the Demand-cum-Show Cause Notice is found to have not allowed any melting or processing loss, whatsoever, hence 1% melting and processing loss is found allowable hereby which entails reduction of the Demand amount from Rs. 1,25,361/- to Rs. 1,04,027/- on this count. Thus the demand of Rs. 1,04,027/- is liable to be confirmed along with interest @ 20% applicable.”
2. The Commissioner (Appeals) confirmed the findings of the adjudicating authority. Hence the appeal before the Tribunal.
3. I have considered the submissions made by both sides.
4. It is noted that, apart from holding that, the melting losses claimed by the appellants at @ 5.8% is very higher as against the loss variation between 1%, and 1.5%, no other adverse finding has been brought on record for demanding duty. The discarding of the appellant’s version of processing loss, indirectly would mean that the raw material received has been consumed clandestinely in the manufacture and illicit removal of finished goods. The charge of clandestine removal which resulted in duty evasion of Rs. 1,25,361/- has been made in the show cause notice taking loss @ 5.8%, whereas the adjudicating authority has accepted the melting loss of 1% and held that the balance quantity worked out @ 4.8% have been removed clandestinely. It is, however, pertinent to note that, during the visit no excess stock of either the raw material or the intermediate products or finished goods was noticed. The entire allegation is based on assumption and, without any credible collateral evidence, the charge of evasion cannot be sustained. I, therefore, find that the order of the lower authority confirming the demand to the extent of Rs. 1,04,027/- is totally unsustainable. So also the order imposing penalty. Accordingly, I allow the appeal and set aside the impugned order of Commissioner (Appeals).