2000 (5) TMI 444 - AT - Central Excise

Summary

Issues:
Appeal against demand of duty and penalty.

Analysis:
1. The case involved discrepancies observed during a raid at the factory premises, including shortages in stock of M.S. Ingots and Runners, and excess stock of scrap and Ferro Alloys. The production reports and statements of the Plant Manager were considered in determining the stock position.

2. Various irregularities were found in the records, such as unrecorded receipts of iron and steel scrap, discrepancies in weighment slips, and removal of goods without payment of duty, leading to allegations of suppression of receipts and clandestine removal of ingots.

3. The appellants were accused of removing finished goods without proper duty entries, producing ingots from scrap without duty payment, and suppressing quantities of ferro alloys used in manufacturing finished goods.

4. The case also involved discrepancies in power consumption records and production quantities, with allegations of suppressed production of finished goods and duty evasion.

5. The appellants defended themselves by explaining practices related to waste and scrap entries, disputing the accuracy of gate registers maintained by external guards, and challenging the calculation of electricity consumption for production of ingots.

6. The argument focused on the reliability of gate registers, the methodology used for calculating electricity consumption, and the lack of systematic norms for determining power consumption for production.

7. The Tribunal found shortcomings in the adjudication process, particularly in the calculation of duty based on electricity consumption. It noted discrepancies in the consideration of electricity bills, the exclusion of low power factor adjustments, and the absence of fixed norms for power consumption during the relevant period.

8. Due to these deficiencies, the Tribunal remanded the case back to the Commissioner for reevaluation, directing a thorough examination of electricity consumption norms and a re-assessment of duty calculations based on accurate data and proper considerations. The appeal was allowed for remand, emphasizing the need for a more comprehensive and fair assessment based on all relevant factors.