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TMI Blog1996 (10) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation, the Department found that the appellants had a production incentive scheme for payment to its workers. This incentive scheme indicated rate of incentive payable for weekly target of production achieved and based on achievement of the target, incentive at 10%, 20% or 35% is paid. The Department, on examination of the records of the incentive payment, was of the view that the production shown in the Central Excise RG 1 register was less than the production on which production incentive had been paid to the workers. Therefore, the Department took the stand that the statutory record maintained by the party for Central Excise purposes, do not show the actual production of steel ingots, billets/blooms. It appeared that the actual production during the period 7-8-1983 to 22-9-1984 for six working days of the week, except Sunday, is represented in the records maintained by the appellants for the purpose of payment of production incentive to the workers and further, the production on Sundays, during the period from 7-8-1983 to 31-7-1988, has not at all been recorded in any record whereas the Department found that power consumption on Sunday was as normal as on any other working da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y since the RG 1 entry of Sundays was shown as nil this quantity was treated by the Department as production of finished goods removed clandestinely without payment of duty. The appellants gave a detailed reply to the show cause notice pointing out that the basis taken by the Department was erroneous for calculating the excess production, but these arguments were not acceptable to the Commissioner, who passed the impugned order confirming the demand for Rs. 25,02,118.50 under Section 11A of the Central Excises Salt Act, 1944. He also imposed a penalty of Rs. 1 lakh on the appellants under Section 173Q of the Central Excise Rules. The Commissioner ordered confiscation of the seized goods found in excess and fixed a fine in lieu of confiscation, of Rs. 10,000.00. 2. The ld. Counsel, Shri V. Sridharan appearing for the appellants, submitted that so far as the Annexure I to the show cause notice is concerned, the details of the production incentive scheme are available which has two separate rates based on 24 hour power availability where the higher production target was fixed and 20 hour availability with the lower target. The Department had gone by the reply to the Assistant Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de to a chart prepared by the appellants annexed to the reply to the show cause notice to show how the working hours if taken as 20 hours and the production is calculated on the basis of the working reports the actual production in the RG 1 register would be closely comparable. 3. In respect of the demand calculated on the production attributable to Sundays as give in Annexure II to the show cause notice the ld. Counsel submitted that the perusal of the incentive scheme clearly shows that the production for the purpose of incentive scheme is from 6.00 P.M. of one Sunday to 6.00 P.M. of the next Sunday. The four working reports relied upon by the appellants, have shown that the production is from 6.00 P.M. of one Sunday to 6.00 P.M. of next Sunday of that week. Therefore, for the production incentive scheme, the production on Sunday is also taken into account. It was, further, argued that the submissions made in relating to the demand in Annexure I to the show cause notice would, itself, prove that the demand made in Annexure II is also incorrect. It was pointed out that for 4 weeks for which working reports are actually available, it has been demonstrated that the production reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Engineer of the Electricity Board before the Commissioner on this issue clarifying and explaining the dictinction between the power cut and peak load restriction, which we find has not at all been considered by the Commissioner. This aspect has a vital bearing on the sustainability of the demand. It is, further, supported by the Gazette notification, which has been referred to, imposing a peak load restriction for 4 hour for industrial and agricultural consumers of power. If 20 hours power supply is taken and the computation of production is made based on the rates applicable to such category in the production incentive scheme, then the contention of the appellants that the production, as indicated in the incentive scheme and as entered in the RG 1 account compares favourably, has to be considered in detail and pronounced upon. The appellants have, further, furnished before the adjudicating authorities certain (sic) based on the clarification of 20 hour power supply for all weeks, in question which has also not received due consideration at the hands of the Commissioner. In regard to demand contained in Annexure II to the show cause notice, a perusal of the production incentive s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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