1996 (10) TMI 232 - AT - Central Excise

Summary

Issues Involved:
1. Validity of demand based on production incentive scheme and power availability.
2. Calculation of demand for production on Sundays.
3. Charge of improper maintenance of RG 1 register.
4. Confiscation of excess stock found during inspection.

Detailed Analysis:

1. Validity of demand based on production incentive scheme and power availability:
The appellants contested the basis on which the Department calculated the demand for excess production. The Department assumed 24-hour power availability based on information from the Electricity Board, which the appellants argued was erroneous. The appellants presented evidence, including the Assistant Engineer's deposition and a Gazette notification, indicating peak load restrictions that limited power availability to 20 hours. The Tribunal noted that these contentions and evidence were not adequately considered by the Commissioner. The Tribunal emphasized the need to reassess the demand considering the 20-hour power availability and the corresponding production incentive scheme rates.

2. Calculation of demand for production on Sundays:
The Department calculated the demand for production on Sundays by assuming normal power consumption and production on those days. The appellants argued that the production incentive scheme accounted for production from 6:00 PM Sunday to 6:00 PM the following Sunday, including Sundays in the weekly targets. The Tribunal found that the Commissioner did not consider this aspect of the incentive scheme. The Tribunal directed the Commissioner to re-evaluate this issue, considering that the incentive scheme covered Sundays.

3. Charge of improper maintenance of RG 1 register:
The Tribunal acknowledged that the charge of improper and irregular maintenance of the RG 1 register against the appellants was well-founded. However, it differentiated this charge from the charge of clandestine removal of goods. The Tribunal highlighted that the Commissioner did not provide sufficient evidence to establish clandestine removal of a substantial quantity of excisable goods. The Tribunal emphasized that the adjudicating authority should look for concrete evidence to support such allegations.

4. Confiscation of excess stock found during inspection:
The appellants provided explanations for the excess stock found during the inspection, including that some of the billets were produced on Saturday and were yet to be entered in the records. Despite these explanations, the Tribunal upheld the Commissioner's order of confiscation and fine on the excess goods found, indicating no reason to interfere with this part of the order.

Conclusion:
The Tribunal remanded the matter to the Commissioner to provide detailed findings on the appellants' defenses regarding the demands in Annexures I and II of the show cause notice. The Commissioner was instructed to re-determine the duty demandable in accordance with the law and after giving the appellants an opportunity for a hearing. The Tribunal upheld the order of confiscation and fine on the excess goods found during the inspection.