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TMI Blog2014 (2) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... FOR THE APPELLANT : SHRI M.P.DEBNATH, ADVOCATE ASSISTED BY SHRI A.ANAND, ADVOCATE FOR THE RESPONDENT : SHRI D.K.ACHARYA, SPECIAL COUNSEL ORDER Per Dr. I. P. Lal Heard both sides. 2. This Application is filed seeking waiver of predeposit of duty of Rs.11,36,00,787/- and equal amount of penalty imposed on the Applicant. 3. The facts and circumstances of the case, in brief, are that two show cause notices dated 02.03.2007 and 03.05.2007 were issued, demanding central excise duty allegedly evaded by suppressing the production of M.S. ingots and removal thereof, without payment of duty for the period, April, 2001 to February, 2007. The impugned show cause notices were decided by Order dated 07.02.2008 by the Adjudicating Commissioner. Being aggrieved by the said Order, the assessee namely, M/s. Union Enterprises had filed an appeal before this Tribunal and vide Order No.S-246-247/A-327-328/KOL/2009 dated 11.06.2009, the Tribunal remanded their case for de-novo decision on the same ground, as had been recorded in case of M/s. Bharat Ingots Steel Company Pvt. Ltd. under Order No.A-1232-1234/KOL/2008 dated 10.12.2008. In case of M/s. Bharat Ingots (cited supra), th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey of Indian Industry. The ld. Advocate submits that a case similar to the case of the present Applicant, is already decided by the Hon ble Tribunal in the case of RA Castings Pvt. Ltd. vs. CCE, Meerut-I, 2009(237)ELT 674(Tri.), holding that electricity consumption alone, could not be only factor, for determining the duty liability, especially when no norms were prescribed and there is no evidence of unaccounted purchase of raw materials etc. This Order has been upheld by the Hon ble High Court of Allahabad, as reported in 2011 (269) ELT 337(All.). Appeal filed by the Department against this Order was dismissed by the Apex Court. Further, on an identical issue, relying on RA Castings case (supra), the Tribunal waived the condition of predeposit in case of Amrit Varsha Ispat Pvt. Ltd. vs. CCE, Kanpur, vide Stay Order No.200-203/2009-Ex. 5. According to the ld. Special Counsel for the Revenue, the background of the demand is that CBEC constituted a Nucleus Group to study sectoral trends in Central Excise Revenue vis-`-vis the rate of industrial growth. The Group selected M.S. Ingots Sub-Sector of Iron And Steel Industry for closure scrutiny, and studied the pattern of electricity c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for transport, deployment of labours etc. can be manipulated, but not the electricity consumption, as the same figures are maintained by the Electricity Board. This view was not altered by High Courts and the Hon ble Supreme Court. It is also stated that earlier also, in the case of Triveni Rubber and Plastics vs. CCE, Cochin, 1994 (73) ELT 7(SC), the Hon ble Supreme Court held that it is not necessary to go into all the factors like installed capacity, raw materials, labour deployed etc. to estimate the production which can be done with the help of electricity- consumption. 6. We find that, in para 4.1.1 of the impugned Order, the ld. Adjudicating Commissioner observed as under:- 4.1.1. Further, on examination of the details of electricity consumed and finished goods manufactured by them, it is found that they were recording production, which was not at all on actual basis. For example during July05, they consumed 18,63,120 units of electricity and produced 763.900 MTs. of M.S. Ingots, whereas in October 05 and November 05, they consumed 15,97,140 units and 16,03,200 units produced 953 MTs. 926.300 MTs. of M.S. Ingots respectively (Annexure-B5 to the SCN). It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Mumbai Bench of this Tribunal in Shridhar Castings case (supra), while disposing of a bunch of stay applications, involving similar dispute, had analyzed the issues in the light of various judgments on the subject, including RA casting s case (supra), in detail, and directed pre-deposit of 50% of the duty confirmed and 25% of penalty against each of the applicants. However, the matter was challenged before the Hon ble Bombay High Court, whereby the Division Bench had set aside the Order. But later, the Larger Bench of the Bombay High Court referred the matter to the Division Bench for reconsideration. The Division Bench of the Bombay High Court in Orange Alloys Pvt. Ltd.(supra), disposing of appeals under Section 35G of CEA,1944 against the judgment of the Tribunal in Shridhar Castings Pvt. Ltd. Vs. Commissioner of Central Excise, Nagpur 2012 (281) ELT 270(Tri.-Mum.), after considering case laws on the subject including that of Bhagawati Steels case and RA Castings case(supra), observed as follows: 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest as well as 1/3rd of the penalty on the application for waiver. By an order dated 6 November 2009 passed in Petition for Special Leave to Appeal (Civil) No. 27293 of 2009 the Supreme Court found that an order for pre-deposit not only of the duty but also of interest and penalty was unjustified. The assessee was directed to pre-deposit duty in the amount of Rs. 1 crore as against a total duty due of approximately Rs. 4.5 crores. 13. The Tribunal has held that the order passed by the Supreme Court in BhagwatiIspat would have to be followed. The Tribunal similarly noted the order of the Supreme Court in Everest Rolling Mills. In BhagwatiIspat 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 BhagwatiIspat and Everest Rolling Mills. The order of the Tribunal should ..... X X X X Extracts X X X X X X X X Extracts X X X X
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