COMMISSIONER OF C. EX. & S.T., LUDHIANA Vs. OM STEEL ROLLING MILLS
LAWS(CE)-2015-3-52
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on March 02,2015

Commissioner Of C. Ex. And S.T., Ludhiana Appellant
VERSUS
Om Steel Rolling Mills Respondents

JUDGEMENT

- (1.)Ashok Jindal, Member (J)
(2.)THE Revenue has filed these appeals against the impugned order passed by the Commissioner (Appeals) dropping the charge of clandestine removal against the respondents. The facts of the case are that during the course of audit in the premises of M/s. Chopra Steel Strips and M/s. Jai Sidh Yogi Rolling Mills, Khanna, it was found that they were claiming burning loss of 5% and 5.88% for their final products. On the basis of audit conducted in the premises of M/s. Chopra Steel Strips and M/s. Jai Sidh Yogi Rolling Mills, Khanna, the range superintendent pertaining to the respondent was asked to furnish report on burning loss claimed by the respondents. As per report of Superintendent burning loss was 4.86% of M/s. Gopal Steel Industries and 4.96% of M/s. Amar Ispat Udyog. The Revenue is of the view that in such case the burning loss should not be more than 2%. Therefore, it was alleged that the burning loss in excess of 2% is not correct claimed by the respondents but they have cleared the goods clandestinely in the guise of showing excess burning loss. Therefore, the proceedings were initiated against the respondents. The respondent contested before the adjudicating authority who confirmed the demand of duty and interest and imposed penalty. Aggrieved with the said orders, the Revenue is before me.
Learned AR appeared on behalf of the Revenue submits that the respondent has not shown that how their machines are claimed excess burning loss in the process of manufacture of their final products which is not permissible beyond 2%. He reiterated the grounds of appeal mentioned in the appeal memo. He submits that the impugned orders dropping charge against the respondents should be set aside.

(3.)ON the other hand, Ms. Priyanka Goyal, learned Counsel appearing for the respondents submits that there is no basis to say that the burning loss may not be more than 2%. He further brings out in my notice the Circular dated 13 -11 -2011 issued by the Chief Commissioner, Chandigarh which shows that burning loss in respect of hot re -rolling mill may vary from 1 -2% to 6 -7% which directs not to issue show cause notice to the manufacturers. If show cause notice is required to be issued, there should be tangible evidence against the respondents. In this case, admittedly the show cause notices were issued to the respondents on the basis of audit conducted in the factory of third party and it was alleged that the respondents have cleared the goods without invoice clandestinely under the guise of burning loss. He also submits the certificate from National Institute of Secondary Steel Technology dated 1 -9 -2011 certifies that the small scale steel re -rolling mills are operating on technologies which are quite old as well as there is no automation of temperature control etc. Due to this, the burning loss in these units are generally on higher side. In general scale/burning loss varies from 2 to 6 -7% in these types of rolling mills. She drew my attention to the para wherein the Commissioner (Appeals) has examined the issue in the light of the above cited circular/certificate and came to the conclusion that without any tangible evidence the charge against the respondent, in the show cause notice is not sustainable and has rightly dropped the demand against the respondent. Therefore, the impugned orders should be upheld.
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