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TMI Blog2017 (3) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... 69 - ALLAHABAD HIGH COURT], is squarely applicable in the present case wherein it was ruled that on the basis of consumption of energy required for manufacture of unit quantity of goods quantum of manufacture of goods cannot be arrived at and such conclusion of manufacture shall be treated as presumptive - the confirmation of demand on the basis of consumption of Gas does not survive. Demand set aside - penalty set aside - appeal allowed - decided in favor of appellant. - E/1569-1572/2007-EX[DB] - A/70106-70109/2017-EX[DB] - Dated:- 4-10-2016 - Mr. Anil Choudhary, Member (Judicial) And Mr. Anil G. Shakkarwar, Member (Technical) Shri Rajesh Chibber, Advocate (In Appeal No. E/1569/2007 E/1570/2007), for Appellant Shri Rajeev Ranjan, Joint Commissioner (AR), for Respondent Per: Anil G. Shakkarwar The present four appellants were issue with a common Show Cause Notice. Therefore, the appeals are taken together for decision. 2. The brief facts of the case are that the above four appellants were issued with a Show Cause Notice No. 50/MRT/Commissionerate/96 dated 31-12-1996. Through the said Show Cause Notice M/s Rathi Udyog Limited (RUL) were called upon to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m April, 1994 to September, 1996 for the total value of ₹ 1,06,64,11,719/- should not be demanded under Section 11A of Central Excise Act, 1944 and why interest on said amounts of Central Excise duty should not be demanded. There was a proposal for imposition of penalty on M/s Rathi Udyog Limited, Shri Pradeep Rathi, Director, Shri M.L. Agarwal, Ex-President, Shri. P.C. Rathi, Director of Rathi Ispat Limited (RIL). 3. The basis for said allegations are as follows:- (a). The basis for demand of ₹ 15,99,61,757/- was that for the manufacture of Bars Rods, M.S.-RIL and Waste Scrap, Natural Gas was used during year 1993-94. The consumption of 56.66 Cubic Meter of Natural Gas was required for manufacture of 1 Ton of Steel. On the basis of consumption of Gas during the period from April, 1994 to September, 1996 1 Ton of Steel can be manufactured by consumption of 56.66 Cubic Meter, it was worked out that the appellant manufactured some quantity of goods and taking into consideration the quantity on which duty was paid the differential duty on the basis of consumption of Gas required for production of Steel was worked out and on the basis of that said demand was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 dated 28-11-1997 and confirmed the demand of ₹ 23,70,56,484/-. Aggrieved by the said order appellant preferred appeal before this Tribunal. This Tribunal passed Final Order No. 1186-1189/99-A dated 18-08-1999 in Appeal No. E/48/98-A, E/263/98-A, 264/98-A E/515/98-A and remanded matter for de-novo consideration. While remanding the matter back to the Original Authority, this Tribunal had directed the Original Authority to offer the appellants the opportunity to take photo copies of document relied upon using their own photo copy machine and appellants were directed to file written reply after obtaining the photo copies of required documents and thereafter the Original Authority was directed to decide the matter. In compliance to this Tribunal s said final order dated 18-08-1999, the Original Authority has passed Order-in-Original No. 17/Commr./GZB/2007 dated 28-03-2007. Through the said Order-in-Original dated 28-03-2007 the Original Authority has confirmed the demand of Central Excise duty of ₹ 4,20,99,820/-, 14,94,550/-, 4,80,765/-, 2,29,84,266/-, 1,00,35,326/-, 15,99,61,757/-, and imposed penalty of ₹ 23,70,56,500/- on M/s Rathi Udyog Limited under Rule 173Q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts on the basis of which allegations made were subsequently retracted immediately after the witnesses came out of the control of Central Excise Officers and once again during cross-examination before Adjudicating Authority. He has further contended that on the basis of similar presumption that is on the basis of electricity consumption presumptive Show Cause Notices were issued to large number of manufactures by Revenue and in the case of R.A. Castings Pvt. Ltd. Versus Commissioner of Central Excise, Meerut-I reported at 2009 (237) E.L.T. 674 (Tri.- Delhi) this Tribunal has held that demand of duty on the basis of electricity consumption is arbitrary and that no experiment was conducted in the factory of appellant for devising power consumption norms. Further, this Tribunal had held that Commissioner was required to prescribe first the norms as per rules and there were no such norms prescribed therefore, demand of duty on the basis of consumption of electricity was held to be unsustainable. The said matter was carried before the Hon ble High Court of Allahabad. The Honble High Court through its ruling in the case of Commissioner of Central Excise, Meerut-I Versus R.A. Casti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r goods were received by RUL were converted into flats and were returned to RIL. RUL received excisable good on payment of duty of which credit was taken at their end and while returning the goods to RIL, RUL was required to pay differential duty. Therefore, if at all some duty was to be paid at the end of RIL, credit of the same was available to RUL and accordingly the whole exercise was revenue neutral and that it has been a settled legal position that where the entire exercise is revenue neutral, extended period could not be invoked. They relied upon latest decision of Apex Court in the case of Special Steels reported in 2016 (334) E.L.T.-A1239SC). 11. It was also contended that assuming without admitting the stand of the Department that since some of the Directors of RIL and RUL were related to each other or some of the Directors were common, both the units were to be treated as related persons. It was submitted that it is a settled legal position that when the transactions are between related persons, no extended period can be invoked. 12. It was also contended by the appellant that as per the case of Department as is apparent from the SCN that the Department carried ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the Divisional Assistant Commissioner to file appeal against such finalization of pricelist before the Jurisdictional Commissioner (Appeals). In the present case the pricelist were admittedly filed by the appellant. The Divisional Assistant Commissioner did not finalize them. Therefore, the Commissioner had no jurisdiction to call upon the assessee for adoption of any other prices, till such time, assessable value through said pricelist was finalized by the Divisional Assistant Commissioner. So far as undervaluation charges are concerned, the Jurisdictional Commissioner did not have jurisdiction to demand duty till such time the price lists were finalized and if aggrieved Appeal was not filed before Commissioner (Appeals) and such appeal was not decided by Commissioner (Appeals). So far as the allegation of short levy on production arrived at on the basis of Gas consumption is concerned, we find that the ruling by Hon ble Supreme Court in the case of Commissioner of Central Excise, Meerut-I Versus R.A. Castings Pvt. Ltd . is squarely applicable in the present case wherein it was ruled that on the basis of consumption of energy required for manufacture of unit quantity of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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