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TMI Blog2005 (3) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... tured and cleared during the period from 1991-92 to 1995-96. A penalty of Rs. 75,00,000/- has been levied on M/s. Hyderabad Electrodes under Rule 173Q of the Central Excise Rules, 1944. A sum of Rs. 4,56,709/- has been demanded from M/s. Standard Electrodes (P) Ltd. under Section 11A(1) of the Central Excise Act, 1944. The goods valued at Rs. 4,50,055/- seized from M/s. Standard Electrodes (P) Ltd. were held liable to be confiscated under Rule 173Q and Rule 226. A penalty of Rs. 2,00,000/- was imposed on M/s. Standard Electrodes (P) Ltd. under Rule 173Q of the Central Excise Rules, 1944. An amount of Rs. 2,50,000/- (Indian currency) seized from residential premises of Shri Kazim Ali, Managing Director of M/s. Hyderabad Electrodes and Managi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rector. This unit is also engaged in the manufacture of Welding Electrodes. The Department initiated investigations against the appellants during December 1995. During the course of investigations, the Department effected seizure of Welding Electrodes and M.S. wire totally valued at Rs. 4,50,055/- from the premises of M/s. SEPL. Cash amounting to Rs. 2,50,000/- was seized from the residence of Shri Kazim Ali. Investigations were conducted with some dealers of the appellants. The Welding Electrodes lying at the premises of the dealers were also seized. A statement of Shri Kazim Ali was recorded on 4-12-1995. He stated that the raw materials required for the manufacture of welding electrodes are M.S. wire, Rutile sand and certain other chemic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown a single clandestine (ii) purchase and consumption of M.S. wire. The raw materials required in the manufacture of (iii) welding electrodes are the following :- MS (1) steel wire Rutile sand (2) Ferro (3) Manganese Calcita (4) Cellulose (5) Mica (6) Feldslar (7) China clay (8) Potasium (9) silicades. The Department has not shown that other raw materials were also purchased in excess for clandestine manufacture and clearance. The department has theoretically determined the (iv) alleged production on the basis of the annual capacity determination certificate. This is without any basis and without any further corroboration. The Department has not let an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; Gian Castings Ltd. v. CCE [2001 (131) E.L.T. 380] Affirmation by the Supreme Court [2004 (163) E.L.T. A203]. (9) Pandit D.P. Sharma v. CCE [2001 (137) E.L.T. 692] Affirmation by the Supreme Court [2003 (157) E.L.T. A201]. (10) Dalmia Vinyl & Ors v. CCE [Final Order No. 96-100/2005, dt. 12-1-2005 passed by the CESTAT, Bangalore]. (11) Sapthagiri Cements & Ors v. CCE [Final Order No. 96-100/2005, dated 12-1-2005 passed by the CESTAT, Bangalore] [2005 (183) E.L.T. 385 (Tribunal)]. (12) Chemco Steels Pvt Ltd v. CCE [Final Order No. 186/2005, dt. 28-1-2005 passed by the CESTAT, Bangalore] [2005 (191) E.L.T. 856 (Tribunal)]. (13) Arch Pharmalabs Ltd. v. CCE [Final Order No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd mainly used for coating the electrodes. In fact, rutile sand has not been declared as a principal raw material. Under these circumstances, to arrive at the quantity of welding electrodes manufactured on the basis of consumption of rutile sand is not at all sound. Assuming that there is definitely a co-relation between the consumption of Rutile sand and production of welding electrodes, there should be some evidence to show that certain buyers purchased the welding electrodes clandestinely manufactured. Since Rutile sand is not the only raw material, the Revenue should be in a position to show that the other raw materials have also been consumed in excess of what has been accounted in their registers. There should be evidence for the purc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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