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TMI Blog2017 (11) TMI 1261X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of clandestine manufacture or clearance. At best it can raise doubt in our mind regarding the actual production accounted However, suspicion, however grave, cannot take the place of tangible evidence. Reliance placed in the case of R A Castings Pvt. Ltd. Vs. CCE [2008 (6) TMI 197 - CESTAT NEW DELHI]. Appeal allowed - decided in favor of appellant. - Excise Appeal No.56698-56699 of 2013 (DB) - A/57146-57147/2017-EX[DB] - Dated:- 13-10-2017 - Mr. (Dr.) Satish Chandra, President And Mr. V. Padmanabhan, Melnber (Technical) Shri Bipin Garg, Advocate for the Appellants Shri H C Saini, AIR for the Respondent ORDER Per: V. Padmanabhan The appellants have filed these appeals against the Order-in-Original No.Commr/RPR/CEX/129/2012 dated 31.12.2012 wherein Commissioner has confirmed demand of Central Excise duty amounting ₹ 8,15,89512/- alongwith interest. He has also imposed penalty of equal amount against the notice. A personal penalty of ₹ 1,50 crore has also been imposed upon Shri Sanjay Agarwal, Director. 2. Briefly stated the facts of the case are that M/s. Dadu Steel and Power Ltd. are engaged in the manufacture of M.S. Ingots fal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 21,23,149/- in their profit and loss account during the year 2007-08 and 2008-09 respectively. The Revenue has alleged that due to excess electricity consumption as indicated above, they have produced extra quantity of MS ingots which were cleared without payment of duty amounting to ₹ 8,15,89,512/- clandestinely. 6. Accordingly, Show cause notice was issued and the impugned order came to be passed in which the Central Excise duty demand was confirmed along with imposition of penalty. Aggrieved by the said decision, appeals have been filed both by the assessee as well as Shri Sanjay Agarwal, Director. 7. With the above background, we heard Shri Bipin Garg, learned Advocate for the appellants and Shri H C Saini, learned DR for the Revenue. 8. Learned Counsel for the appellants pleaded that they have never suppressed the production and undertaken clandestine clearance. He assailed the impugned order mainly on the following grounds: (i) The duty demand has been confirmed in the impugned order only on the basis of electricity consumption. On the basis of theoretical calculation based on the Technical opinion report of Shri N K Batra, Professor of Il T, Kanpur, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 to 754 KWH and in cases where it is manufactured using sponge iron, the consumption ranges between 815 to 1046 KWH. The findings also find support in the article of Shri Varshney Executive Director of All India Induction Furnace Manufacturer Association, New Delhi. The appellant has challenged such quantification of the Materialization Test reports for production of MS ingots with the argument that consumption of 830 units per MT cannot be applied across the board for all times without carrying out controlled production in the appellant's factory. They have also highlighted factors such as the following which can have impact on electricity consumption. (1) It is stated that power consumption depends upon supply of power to the furnace and the different types of raw material which is used. (2) If there is power break down then the entire production gets stopped. Further, if it is for 5 to 6 hours, furnace is required to be restarted. (3) In the case of break down of other machinery, the factory cannot sustain production. (4) The skill of labour / employee is also a factor. In the light of above factors, they have submitted that allegations of clandest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellants in the appeal is clandestine clearance cannot be alleged only on the basis of projected figures of production on the basis of electricity consumption. They also cited the case laws of R A Castings Pvt. Ltd. (supra) which stand upheld by Hon ble Supreme Court. It has also been pointed out before us that the case law has also been followed by the Tribunal in many other decisions. 14. We have perused the decision in the case of R A Castings Ltd. The Tribunal in the said decision has held as follows : 23. The Tribunal has consistently taken the view that wherever electricity consumption alone is adopted as the basis to raise demands, the order of the lower authorities have been held to be unsustainable in law and set aside and the Revenue had been directed to carry out experiments in different factories on different dates to arrive at the average to be adopted as a norm, which can be followed thereafter and the Revenue in the present case not having conducted any experiment whatsoever cannot be permitted to justify the demands raised. It will be appropriate on the part of the Revenue to conduct experiments in the factory of the appellants and othe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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