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2015 (8) TMI 57 - AT - Central ExciseClandestine manufacture and removal of goods - Non accounting of goods - whether on the basis of the evidence, the Commissioner's orders confirming the duty demands against the appellants and imposing penalty on them can be upheld - Held that:- Investigation in respect of the appellant unit started when the unit of NIPL was visited by the Central Excise officers on 03/10/05 and their sales of MS Ingots to various rolling mills were ascertained on the basis of the entries in their private ledger books. It was found that NIPL were not showing the entire quantity of MS Ingots sold by them to various customers in the RG-1 register and were paying duty on much lesser quantity. Since the appellant unit - M/s Everest, M/s MPK and M/s Khetan were among the customers of NIPL, the quantity of MS Ingots supplied by NIPL to these units during period from 02/8/05 to 01/10/05 as per the entries of NIPL ledger book was compared with the supplies as per NIPL records in respect of which the invoices had been issued. It is on this basis it is alleged that during the period from 02/8/05 to 01/10/05 M/s Everest, M/s MPK and M/s Khetan have received 143.32 MT, 40.21 MT and 39.93 MT of unaccounted MS Ingots from NIPL. However, the duty demand against M/s Everest, M/s MPK and M/s Khetan is not on this basis Thus the evidence in support of Department's allegation of duty evasion against the appellants is - (a) entries in the private ledger book of NIPL which showed supply of certain quantity of MS Ingots to the appellants during period from 02/8/05 to 01/10/05 for which no invoices have been issued by NIPL and (b) power consumption per MT of rolled products in the case of SSSRM - 102,09 units per MT while the same in the case of the appellant units is from 225 units per MT to 275 units per MT. No experiments or studies have been conducted by the Department in respect of the rolling mills of the appellant companies to determine their average power consumption for production of one MT of rolled products. - Commissioner in the order in the case of M/s Everest has accepted that the rolling mills of SSSRM is automatic rolling mill, but he has still applied the power consumption norm of SSSRM to the appellant unit, on the ground that the products being manufactured by SSSRM are CTD bars which consume more power while the products being produced by the appellant consume lower power. In our view this assumption is an arbitrary assumption without any basis and without conducting any study or experiment in this regard. - not even inspection or study has been conducted to. determine their actual power consumption norm. Beside this, neither any evidence unaccounted purchase of raw material nor there is any evidence of clandestine/ unaccounted clearances of final product. Merely on the basis of an arbitrarily adopted power consumption norm, the production of an assessee on the basis of his power consumption cannot be estimated and duty demand cannot be affirmed against him on this basis. - impugned orders are not sustainable. The same are set aside. - Decided in favour of assessee.
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