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TMI Blog2012 (11) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... s under Rule 25. On an application for waiver of pre-deposit, the Tribunal has directed the Appellants to deposit an amount representing fifty per cent of the duty and twenty five per cent of the penalty 2. The Appellants engage in the manufacture of MS Ingots. The main raw-material is Sponge Iron, Iron and Steel scrap, Pig Iron and Ferro Alloys. The Appellants purchased an Induction furnace in 2001. Electricity is supplied by Maharashtra State Electricity Board. The factory is a power intensive unit. Intelligence information was received by the Department that the Appellants were evading the payment of excise duty by suppressing production in the statutory records and clearing finished excisable goods without payment of Central Excise Duty. Central Excise Officers visited the factory premises on 25 October 2005 and took custody of documents. Statements were recorded, inter alia, of persons involved in the manufacture, transportation and sale of the products. Amongst the documents seized were letters addressed by the Appellants to the manufacturers of the induction furnace on 7 October, 2005 and 24 October, 2005. The documents of the Appellants indicated that the furnace was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bogus purchase invoices were used to cover up clandestine clearances of finished goods from the factory and to balance the quantity of sale and purchase in the books of accounts. 5. Aggrieved by the order of the Adjudicating Authority the Appellants had filed an appeal before the CESTAT. An application for waiter of pre-deposit was made. The Tribunal delivered its impugned order dated 28 February 2011 in a batch of 38 cases and directed a deposit of fifty per cent of the amount of duty and twenty five per cent of the amount of penalty. In one of those cases, which related to a company by the name SRJ Peety Steels Pvt. Ltd., a Division Bench of this Court at Aurangabad consisting of Smt. Justice Nishita Mhatre and Shri Justice M.T. Joshi heard the appeal which was disposed of finally with the consent of the parties. The Division Bench remanded the proceedings back to the Tribunal, observing that the Advocate for the Appellant there had urged that the Tribunal had not considered its own decisions in two cases viz. in Nasik Strips Pvt. Ltd. v. Commissioner of Central Excise, Nasik - 2011 (263) E.L.T. 606 and in Mithunlal Gupta Bhavshakti Steelmines Pvt. Ltd. v. Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants did not make out a prima facie case for total waiver of pre-deposit; 8. We have heard the appeal finally at this stage with the consent of the learned Counsel appearing on behalf of the Appellants and the Revenue. 9. Learned Senior Counsel appearing on behalf of the Appellants submitted that though this appeal arises out of an order passed by the Tribunal on an application for waiver of the pre-deposit a substantial question of law would arise inasmuch as (i) The Tribunal has not considered relevant material; and (ii) The Tribunal has considered irrelevant material so as to warrant the interference of this Court. In this regard, learned Counsel placed specific reliance on the following : (i) In the present case as the notice to show cause would reveal experiments were conducted on a surprise basis at the establishment of the Appellants by the Revenue but the assessment has not been made by the Adjudicating Officer on this basis. This, it was urged, was a circumstance which was ignored by the Tribunal; (ii) Though letters were addressed by the Appellants to the manufacturer of the Induction furnace complaining that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces, it was urged that there is no warrant for interference with the order passed by the Tribunal. 11. In the present case, prima facie, at this stage, it emerges from the order passed by the Adjudicating Officer that the allegation against the Appellants was of suppression of actual production; a clandestine removal of goods and of the fabrication of record. Prima facie at this stage that finding has been established by the Adjudicating Officer. The Adjudicating Officer has recorded that the actual electricity consumed between the period 16 December, 2003 and 24 March, 2008 was 7,91,87,789 units. On this, there is no dispute since that forms part of the record of the M.S.E.B. The actual production has been worked out at 89,887.239 M.T. on the basis of the Appellants letter dated 20 October, 2005 to the manufacturer of the Induction Furnace to the effect that 925 units per metric tonnes were consumed upto 20 October 2005 and a letter dated 24 October, 2005 stating that about 860 units per metric tonnes have been consumed after that date. The present case is based on the documentary material of the appellants themselves. Moreover, electricity consumed in excess is not the sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the order of the Tribunal directing the deposit of fifty per cent of the duty at this stage would appear excessive particularly having regard to the directions issued by the Supreme Court in Bhagwati Ispat and Everest Rolling Mills. The order of the Tribunal should be modified to that extent.
14. For the reasons indicated above, we direct that the Appellants shall make a pre-deposit of twenty five per cents of the demand for duty. We dispense with the deposit of penalty. The pre-deposit shall be effected within a period of six weeks from today. The order of the Tribunal shall stand modified to that extent. The questions of law shall stand answered accordingly. On the request of learned Counsel for the Appellants, we clarify that the observations in this order are confined to the disposal of the appeal which is against an order passed by the Tribunal on an application for waiver of pre-deposit. The appeal shall be heard and disposed by the Tribunal without treating these observations as a conclusive opinion of the Court on the merits of the rival contentions at the hearing of the appeal. The Appeal is disposed of in these terms. There shall be no order as to costs. X X X X Extracts X X X X X X X X Extracts X X X X
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