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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 ..... n order passed by the CESTAT on 28 February, 2011 [2012 (281) E.L.T. 270 (Tri.-Mumbai)] on an application for waiver of pre-deposit. The Assessing Officer having found that the allegation made against the Appellants of suppression of actual production of ingots, clandestine removal of goods and fabrication of records stood established, confirmed a duty demand of Rs. 11.51 crores for the period between 16 December 2003 and 24 November 2008 and sustained an order for recovery of interest under Section 11AB. A penalty was imposed on the Appellants in the amount of Rs. 11.51 crores under Section 11AC and of Rs. 1.15 crores 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of power per M.T. of ingots produced, till 20 October, 2005 against a commitment of 725 to 750 units by the furnace manufacturer and between 850 to 860 per M.T. after 20 October 2005. Based on the record of the Appellants, the Commissioner arrived at the total production which was suppressed from the statutory record. The Commissioner also found that the books of accounts had been fabricated. It has also been found that in order to cover up clandestine removals, the Appellants had procured bogus purchase invoices of trading goods and cleared their finished excisable goods under the garb of traded goods. The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en directed to be disposed of on its own merits without being bound by the order of the Aurangabad Bench. All contentions have been kept open. 7. Before we proceed to deal with the rival contentions, we admit the appeals on the following substantial questions of law : (a) Whether in the facts and circumstances of the case, the Tribunal was justified in directing the Appellants to deposit 50% of the duty amount and 25% of the penalty amount; (b) Whether in the facts and circumstances of the case, the Tribunal was right in holding that the Appellants 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 thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the material collected during the course of the investigation; (v) The books of accounts have been proved to be fabricated. Moreover, it has been found that bogus purchase invoices were used to cover up clandestine clearances of finished goods from the factory. (vi) Bogus invoices were created show purchase of goods so as to clear finished excisable goods under the garb of traded goods. In the circumstances, 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 Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ati Ispat would have to be followed. The Tribunal similarly noted the order of the Supreme Court in Everest Rolling Mills. In Bhagwati Ispat which also involved an issue of clandestine removal, the Supreme Court directed a deposit to be made of one-fifth of the duty. In Everest Rolling Mills, the Supreme Court required a pre-deposit of twenty two per cent of the duty demanded. Having regard to this position 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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