Case Law Details
Shree Hari Sponge Private Limited Vs Commissioner of Central Excise & Service Tax (CESTAT Kolkata)
Duty demand cannot be raised on the presumption of higher production for reasons of high electricity and raw material consumption
We find that the entire basis of the instant demand is the reports of external agencies. No efforts have at all been made to find out whether at all there was any unaccounted production and clearance of goods. The Tribunal in the case of A. Castings (P) Ltd. (supra) has dealt with an identical issue wherein it has been held that duty demand cannot be raised on the presumption of higher production for reasons of high electricity and raw material consumption. It has also been held that tax is on the manufacture and clearance, and it is to be proved beyond doubt that goods have actually been manufactured.
In the present case we do not find any evidence, much less any corroborative evidence, to show that there is production and clearance of the quantity of final products which have been arrived at in the notice by comparing the external reports and the quantity of production disclosed by the Appellant in their excise returns.
We have also perused the findings made by the Ld. Commissioner in para 18 of the impugned Order wherein reference has been made to the alleged seizure of a consignment alleged to be bearing the name of the Appellant without valid invoices. We find that no such allegation was ever made in the Show Cause Notice. Moreover, no proceedings have been initiated pursuant to such seizure of consignment except the statement of the employees of the Appellant company wherein it was deposed that the company is not maintaining any process log book nor do they have any lab test report or drop test report. No statements of the driver of the vehicle or the owner of said consignments are in record nor there is any clue whether any proceedings have been taken subsequent to the alleged seizure. We are of the view that the above deposition could not be made the sole ground to assume that there has been clandestine manufacture and removal of excisable goods without any supporting corroborative evidence. It is a settled legal position that the charge of clandestine clearance of goods is a serious charge and cannot be made on presumptions and assumptions and the onus lies on the Revenue to prove it with some evidence which has not been done in the present case.
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Such Judgement would encourage Tax Evaders. Burden proof can never be absolutely placed on one side. It is not understood as to why the assessee shall not be made responsible to explain the excess consumption of raw material (Iron Ore) and energy, the two main components of any manufacturing process.