2013 (11) TMI 1196 - AT - Central Excise

Criteria to determine the output level - Waiver of Pre-deposit Held that - Adequate inquiry was made to find out whether any laboratory elaborate test report was obtained by Revenue to come to the conclusion that higher yield for sponge iron for the outcome of the quantum of input of iron was consumed - There was no such report on record - Even to appreciate the industrial norm of yield of sponge iron, inquiry was made as to whether there was comparative case brought out by Revenue for rebuttal by appellant - That also is absent - mere consumption of electricity shall not guide Following CCE, Meerut-I vs. R.A. Castings Pvt. Ltd. 2010 (9) TMI 669 - ALLAHABAD HIGH COURT - the appellant directed to deposit Rs. 20 lakhs as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues:
1. Discharge of demand of excise duty.
2. Determination of output level based on electricity consumption.
3. Adequacy of evidence for determining yield of sponge iron.
4. Compliance and pre-deposit requirements during pendency of appeal.

Analysis:
1. The appellant expressed willingness to discharge a demand of Rs. 9,04,277/- towards excise duty for the appeal hearing. However, another demand of Rs. 10 lakhs, along with a major demand of Rs. 5,35,10,738/- was also highlighted during the proceedings.

2. The appellant argued that electricity consumption alone should not be the sole criterion for determining the output level. They contended that an arbitrary demand, as presented in the show cause notice, should not be sustained without evidence proving the estimated output by the Revenue.

3. In response, the Revenue justified the determination of the output level based on specific parameters mentioned in the show cause notice. The appellant was informed about the yield of sponge iron from iron ore consumption, which differed from the yield percentage provided by the appellant.

4. The Tribunal conducted an inquiry to assess the evidence supporting the Revenue's claims regarding the yield of sponge iron. It was revealed that there was no detailed laboratory test report or comparative case presented by the Revenue to substantiate their calculations. The Tribunal also referred to a judgment by the Hon'ble High Court of Allahabad to emphasize the importance of substantial evidence in such cases.

5. The Tribunal directed the appellant to deposit Rs. 20 lakhs within a specified timeframe and comply with the order. In return, the requirement of pre-deposit for the remaining balance amount during the appeal's pendency would be waived.

6. Regarding stay applications, the Tribunal granted waivers for pre-deposit requirements during the pendency of the appeals for specific appellants, subject to compliance with depositing certain amounts within a designated period.

This detailed analysis encapsulates the key arguments, evidentiary considerations, and compliance directives outlined in the judgment delivered by the Appellate Tribunal CESTAT NEW DELHI.