2010 (9) TMI 669 - ALLAHABAD HIGH COURT

Demand - Clandestine removal - excess production of MS ingots - No experiment have been conducted in the factories of the appellants for devising the consumption norms of electricity for producing on MT of steel ingots - Tribunal also observed that the electricity consumption varies from one heat to another and from one date to another and even from one heat to another within the same date - Therefore, no universal and uniformly acceptable standard of electricity consumption can be adopted for determining the excise duty liability that too on the basis of imaginary production - It is settled principle of law that the electricity consumption can not be the only factor or basis for determining the duty liability, that too on imaginary basis, especially when Rules 173E mandatorily requires the Commissioner to prescribe/fix norm for electricity consumption first and notify the same to the manufacturers and thereafter ascertain the reasons for deviations, if any, taking also into account the consumption of various inputs, requirements of labour, material, power supply and the conditions for running the plant together with the attendant facts and circumstances - The income shown in the balance sheets is not the income derived form the sources declared by the appellants, there is nothing on record to link it with the so called clandestine removal of the goods - find that the Revenue has invoked the proviso to Section 11A(1) of the Act but no case has been made out in the show cause notices or in the adjudication order that there were any mis-statement, suppression of fact or fraud on the part of the respondents - Decided in favour of assessee.