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TMI Blog2016 (10) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Central Excise, Indore are filed by the Revenue. The brief facts of the case are that based on intelligence to the effect that certain units of the Magnum Group were not discharging Central Excise duty by resorting to clandestine removal of excise goods, investigations were started by the department in April, 1999. On completion of the investigation a show cause notice dated 20.04.2000 was issued to three main manufacturing assessees to demand Central Excise duties and to impose penalties. The case was adjudicated and the Commissioner vide the impugned order dropped all proceedings against all the noticees. The conclusion of the original authority is as below: In view of the above discussions, it is clear that concerning none ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the RG-I register. (b) There are cases of electricity theft booked by MPSEB against these units on 01.10.1999. This supports the department claim for suppression of production. (c) The duty calculation was made based on electricity consumption based on production of private records maintained by Sh. R. C. Sharma from 01.04.1999 to 24.04.1999. The detailed production was accordingly fixed and duty demand for the impugned period was calculated. (II) CASE AGAINST M/S I. R. INDUSTRIES PVT. LIMITED: (a) The private record maintained by Sh. R.C. Sharma shown datewise shiftwise production for the period 01.04.199 to 27.04.1999. The unit is using generator for power generation. The average production was arrived at based on the capaci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the respondent-assessees. We have also perused appeal records including written submissions made by Revenue as well as by the respondent. The case of the department is mainly based on a handwritten chart recovered from Sh. R.C. Sharma who was present in the factory premises of M/s B. R. Associates Pvt. Limited on 28.04.1999. The production figures mentioned in the chart was considered as true in respect of two manufacturing units - M/s B. R. Associates Pvt. Limited and M/s I.R.S. Industries Pvt. Limited. The calculation of duty demand was mainly projected from this basis by adopting the norms as per Rule 173E. Based on such calculation the case of clandestine manufacture and clearance of alloys and non-alloy steel ingots was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re selectively taken in respect of different respondents without assigning any reason. 7. Regarding invoking provisions of Rule 173E to quantify duty demand from two of the respondents, we note that the Revenue in appeal contended that wrong mentioning of rules will not vitiate the proceedings. Further, reference to Rule 173E has been made only for the limited purpose of quantification of duty evaded by the party by adopting reasonable and pragmatic means.. We find that it is not a simple case of wrong mentioning of rule. In para 16.3 of the show cause notice the basis of calculating the quantum of duty was mentioned as provisions of Rule 173E. Even if it is considered that Rule 173E was referred to only for the calculation purpose for arr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction and that two for only 24/27 days. There is nothing to indicate as to how the average production derived could be taken as the standard production and was not a one time achievement. The excess production has not been established in the case. Here it is worthwhile to mention that for working out the demand, only 24/27 days of production written on a piece of paper recovered from a person who has been disowned by the noticee No. 2 & 3, can not be taken as a proof. As regards, the electricity consumption it depends upon the line losses, efficiency of panels etc. Moreover, at the most, if one month consumption was to be taken, this could have been somewhere during the middle of the period. Also, with the passage of time the efficiency of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teels Limited was mainly based on the allegation that the other two manufacturers respondents have clandestinely manufactured ingots which were received by M/s Magnum Steels Limited for clandestine manufacture and clearance of their final product. We note that when the case of manufacturer suppliers of ingots itself has not been supported with adequate evidence further demand based on such purported excess production of raw material cannot stand. Further, we also note that average consumption of electricity was worked out in respect of M/s Magnum Steels Limited based on the consumption of particular period. The respondents contended that if average has to be worked out of the consumption the data should be taken for the entire year. In that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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