P. Anjani Kumar DECISION
P. Anjani Kumar, Member (T)
1. The appellants are engaged in the manufacture of Copper ingots and are availing the exemption under Notification No. 56/2002-CE : MANU/EXCT/0123/2002 dated 14.11.2002 as amended; after conducting an audit of the records of the appellant, Revenue was of the opinion that the appellants have shown production in excess of the capacity or actual production with a view to avail refund of the duty paid. Revenue conducted one heat cycle for productions of ingots in the factory of the appellants and it was observed that 1200 Ltrs. of LDO (Light Diesel Oil)was consumed for production of 7267 kg of copper ingots; while the appellants consumed 382500 Ltrs. of LDO for manufacture of ingots/scrap in the year 2005-06; as per the above 2316356 kg of copper ingots could have been manufactured whereas, the appellants have shown production of 2500915 kg of copper ingots during the period; thus 184559 kg of copper ingots were shown to have been produced in excess without actually manufacturing the same; the appellants have wrongfully availed refund of Central Excise duty of Rs. 60,83,064/- fraudulently a show cause notice dated 21.05.2010 was issued to the appellant seeking the demand of wrongfully availed self credit. The show cause notice was adjudicated by the impugned order dated 28.04.2011 vide which the proposal in the show cause notice was dropped. Committee of Chief Commissioners having review the order have directed the commissioner to file an appeal against the same. Hence, this appeal by Revenue.
2. Shri Pawan Kumar and Shri Shivam Syal Ld. Authorized Representatives for the revenue reiterated the grounds of appeal and submitted ideal input output ratio for scrap to ingots was 1:0.9 whereas the respondent claim 1:09468; the test check conducted by the audit showed the ratio 1:09417; during the test check 1200 Ltrs. of LDO could produce 7267 Kg of copper Ingots; Shri Rakesh Chaudhary authorized signatory of the respondent was fully satisfied with the method of verification; the respondents suppress the actual consumption of LDO required for manufacturing unit quantity of final product from the department. Ld. Authorized Representative submits that Ld. Commissioner wrongly relied on the case of M/s. Oudh Sugar Mills Ltd. 1978 (2) ELT J-172 (SC) and concluded that the show cause notice was issued on the basis of presumptions and assumptions; the respondents suppressed the quantum of LDO consumed for production of a unit ingots; a show cause notice was issued after a factual verification of the actual production therefore, the same cannot be disregarded. They submit that the reliance on Polychem Products India Pvt. Ltd. 2005 (192) ELT Tribunal Delhi, is misplaced as the show cause notice was issued on the basis of physically verified data.
3. The Ld. Authorized Representative rely on the case of D. Bhoormull 1983 (13) ELT 546 (SC) and J.M. Aggarwal Tobacco company Pvt. Ltd. 2010 (261) ELT 1008 Tribunal Delhi and Shingar Lamps Pvt. Ltd. MANU/CE/1396/2002 : 2002 (150) ELT 290 (Tri.-Delhi) and submits that
• Department is not required to prove the case with mathematical precision.
• The burden to rebut many facts relating to the illicit business remain with the concerned person who has the knowledge of the same.
• Adjudicating Authority should weigh the independent evidence on record.
4. Shri Vinamar Gupta and Shri Vibhore Gupta, Ld. Counsels for the respondent submits that the consumption of LDO could be different depending on the atmospheric temperature, quality of raw material, condition of the furnace, initial temperature of furnace, per day frequency of the heats and the skill of the labourers and therefore, the entire production capacity for the year cannot be extrapolated on the basis of observation for a single heat. Ld. Counsel furthers submits t........