9911796707
TMI Blog2000 (5) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants and their registered office on 28-12-1990. On physical verification, following discrepancies were observed :- (A) Shortage in the stock of M.S. Ingots - 32.942 MT (B) Shortage in the stock of Runners - 25.000 MT (C) Excess in stock of scrap - 60.000 MT (D) Excess in stock of Ferro Alloys - 2.500 MT 3. RG-1 register was found written up to 25-12-1990. Production reports of 25th to 27th December, 1990 were found available and were taken into consideration in arriving at the stock position on 28-12-1990. Incriminating records were resumed from the factory and its registered office. In addition, records resumed from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t apparently accounted for 2257.779 MT of iron and steel scrap. Scrutiny of 3 gate registers and the entries with the entries in purchase and sale registers relating to Ferro Silicon and Ferro Manganese revealed that the appellants had not entered these materials in the purchase, sale registers and RG 23A Part I. It was alleged that the appellants had suppressed receipt of 17.400 MT of ferro alloys during 8-6-1988 to 2-1-1989 and 19-3-1990 to 27-6-1990. Scrutiny of resumed weighment slip No. 21 dated 28-8-1988 and its comparison with RG-1 and GP-1 book revealed that a quantity of 14.200 MT of M.S. Ingots covered by the weighment slip involving central excise duty of Rs. 5,442.15 had been removed. Correlation of weighment slip with RG-1 regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout making debit entries in PLA or in RG 23A Part II involving central excise duty of Rs. 18,326.70. It was also noticed that the finished goods were removed under two gate passes dated 27-12-1990 without payment of duty of Rs. 12,470.85. It was also noticed that though Tuesday was off day of the factory, the ingots had been produced and entries were made in RG-1 register and on some occasions these entries had been subsequently scored off. 6. Scrutiny of form-IV register revealed that when quantities of finished goods manufactured out of scrap issued were examined it was noticed that there was an yield of 92% ingots which was further confirmed by the Managing Director of the company. Therefore it appeared that the appellants manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egisters were not available, it was revealed that the party had apparently produced 13254.149 MT finished goods till December, 1990 as against the recorded quantity of 6,243.736 MT. It therefore appeared that the appellants suppressed production of finished goods to the extent of 7,010.683 MT valued at Rs. 5,46,83,327.40 involving central excise duty of Rs. 35,84,074.92 during the period May, 1988 to December, 1990. This quantity of 7010.683 MT includes the quantities of MS Ingots alleged to have been removed in the foregoing paras. Accordingly, A SCN was issued to the appellants asking them to explain as to why the duty amounting to Rs. 35,84,074.92 should not be demanded from them in respect of finished goods 7010.683 MT and why a penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same was not allowed. 11. In regard to the calculation of the quantity of ingots manufactured on the basis of consumption of electricity, ld. Counsel submits that though the period in dispute is 20 months, only 10 electricity bills had been taken into consideration when all the electricity bills for 20 months were available. He submits that admitted position was that the meter was defective and was showing lower power consumption; that in the electricity bills there was addition done by the State Electricity Board; that this addition was termed as 'low power factor'; that this adjustment on account of supply of power at low voltage was not considered by the authorities; that this addition ranged from 5% to 55%. Ld. Counsel submits that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We note that only 10 months electricity bills have been taken into consideration for calculating the average consumption power of one MT of ingots. We also note that in the electricity bills an amount was added as low power factor. This amount was on account of meter showing lower reading. While calculating the average this low power factor has not been included. We note that no norm was fixed during the material period in terms of Rule 173E. We also note that while giving specifications of the furnace, the appellants had submitted that the specifications showed that 630 units will be required for the manufacture of one MT of ingots. Since the electricity consumption norm is the basis for computing duty, we find that the adjudicating author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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