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TMI Blog2018 (7) TMI 1524X X X X Extracts X X X X X X X X Extracts X X X X ..... e these findings have attained finality, the Adjudicating Authority could not have without filing an appeal and adducing contrary evidence gone beyond the findings recorded by the Tribunal. In the absence of so, in the adjudication order, the Lower Authority should have followed the order of the Tribunal and considered the production capacity of the appellant SSPL as indicated in the Final Order recorded by Division Bench. The allegation of the Revenue that appellant SSPL had clandestinely manufactured excess production and removed the same without payment of duty falls flat - In view of the findings of the Division Bench order, it is found that lower authorities have erred in coming to a conclusion there was excess production and clearances clandestinely from SSPL. The entire demand needs to be set aside. Demand of Interest and penalty - Held that:- Since the entire demand of SSPL stands set aside, the question of interest and penalty on SSPL does not arise, as also the question of imposing penalty of KSPL also does not arise. Appeal allowed - decided in favor of appellant. - Appeal Nos. E/904-905/2012 - A/30693-30694/2018 - Dated:- 9-7-2018 - Mr. M.V. RAVINDRAN, MEMBE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatutory Form-IV register was also indicate the clandestine activity under taken by SSPL. The Show Cause Notice was issued for this reason to SSPL. The said show cause notice was adjudicated by the Commissioner as an Adjudicating Authority and demands were confirmed to the extent to ₹ 46,09,799/- and penalty was imposed on SSPL under the erstwhile Rule 173Q of Central Excise Rules, and imposed penalty on KSPL under provisions of Rule, 209A of the Central Excise Rules, 1944. The Order-in-Original dated 29.01.1998 was contested before the Tribunal and this Tribunal by Final Order dated 21.11.2003 remanded the matter back to the Adjudicating Authority to reconsidered the issue afresh. The Adjudicating Authority in denovo adjudication proceedings dropped the proposals in the show cause notice holding that capacity of the furnace installed in SSPL could not have produced the goods for demands raised. Revenue was aggrieved by the said Order-in-Original and preferred an appeal before the Tribunal in appeal No. E/224/2006. The said appeal was disposed of by the Bench vide Final Order dated 15.09.2010 wherein, the matter was remitted back to the lower authorities to reconsider the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achieve higher production and the heat registers both private and officials were showing the higher production at an average of 3.5 to 3.8 MTS per heat. He would submit that the Adjudicating Authority has simply held against the appellant on this has there is nothing on record, to show that there was feasible to enhance the capacity by manipulation of crucible of the furnace. He would submit that the Adjudicating Authority has erred in finding fault with the appellant inasmuch that he had relied upon a circular which has directed all the ingot manufacturing units to install a weighbridge within a factory premises; which is an incorrect finding as KSPL to adjacent to appellants the weighbridge was nearest and all the production was recorded correctly. It is his further submission that the Adjudicating Authority has also relied upon the electricity consumption to hold that there was clandestine manufacturer and clearances which is again an incorrect finding as the electrical consumption cannot be a based for holding that there has been clandestine manufacturer. It is his further submission that the Adjudicating Authority has not considered the most important submission of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d install weighbridge within the premises. It is her submission that clearances which are affected by SSPL to KSPL are proved by the same registers as maintained by SSPL and also ingots movement registers. It is her submission that both the units are located next to each other and has only wire fence segregating and SSPL as well as KSPL is headed by same chairman and the offices are located in the same building. It is her submission KSPL is not under excise control as they are availing exemption under Notification being manufacturers of M.S. bars and rods from ingots, it is her submission that the Order-in-Original is correct in confirming the demands raised beyond the limitation period as ingots were clandestinely produced and cleared. It is her further submission that penalty on appellant KSPL as per Rule 209(A) of Erstwhile 1944 is imposable as they were receiving the clandestinely cleared goods from SSPL. As regards the validity of electricity consumption register to prove suppressed production of steel ingots, she submits that the decision of Apex Court in the case of M/s. R.A. Castings Pvt. Ltd., [2011 (269) ELT A108 (SC)] is distinguishable and is not relevant to the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured. He also confirmed the demand of ₹ 27,34,645/- on the basis of ingot movement register from M/s. SSPL to M/s. KSPL. We find that on one hand the Commissioner has found excess production of 4096.544 MTs of M.S. Ingots from the heat register, electricity consumption register and log book of induction furnace and on the other hand, he also found clandestine clearances of about 4257.773 MTs of M.S. Ingots for the period from 3-4-90 to 5-3-92. We find that if the production determined from heat register, log book of induction furnace register and electricity consumption register is determined, then in addition to that, production of additional ingots cleared to M/s. KSPL have not been explained. We also find that the capacity of production of the furnace as per manufacturer s invoice dtd. 23-3-87 is 2.1 MTs and this very capacity was determined by the Commissioner of Central Excise, Hyderabad-III under Induction Furnace Annual Capacity (Determination) Rules, 1997 under his letter No. IV/16/92/97-CX., dated 1-10-97. Therefore, there is force in the plea of the appellant that when the capacity of the induction furnace is 2.1 MTs as shown by the manufacturer of furnace in 1987 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rabad-III had determined the capacity of the induction furnace at 2.1 MTs under the Induction Furnace Annual Capacity (Determination) Rules, 1997 vide his letter No. IV/16/92/97-CX dated 01.10.1997. Though the capacity determined under the above rules is a notional figure with reference to the dimensions/parameters of the furnace, we cannot hold that the actual production would be so wide off the capacity determined under the rules. The show cause notice does not suggest this possibility as a practical one. Moreover, the A.P. Productivity Council had assessed production capacity of the assessee at 2.1 MTs. The appeal argues that this certificate of the Council has to be ignored as the Council was not aware of the clandestine production of goods by SSPL during the material period. We are not able to appreciate this logic. The capacity of the furnace is certified with reference to reliable parameters, such as dimension. This assessment cannot be influenced by the knowledge as to the alleged clandestine production and clearance engaged in by the assessee. 10. On specific query from the Bench, as to whether the Revenue has preferred an appeal against above reproduced findings of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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