TMI Blog1997 (4) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to confiscation. 2. The brief facts of the case are that M/s. Surendra Alloys are engaged in the manufacture of steel ingots classifiable under Chapter Sub-heading 7206.90 of the CETA, 1985 along with runners and risers classifiable under sub-heading 7204.90. They had installed an electric induction furnace of 25 MTs capacity for remelting steel scrap for the purpose of manufacture of steel ingots, at B-25, Okhla Industrial Area, Phase-I, New Delhi which was owned by M/s. Metal Fittings, (P.) Ltd. who had rented out a part of this premises to the Party - I and in the remaining premises, Party - II was engaged in the manufacture and clearance of steel rolled products mainly angles, shapes and sections, excisable under Sub-heading 7228.71 which were exempted from payment of duty under Notification 90/88, dated 1-3-1988. Party-II had installed a rolling plant for manufacture of rolled products out of steel ingots purchased by them. 3. On 13-1-1989, Central Excise Officers visited the premises at B-25, Okhla Industrial Estate and conducted verification of stock of Party No. I which revealed a shortage of 19.735 MTs of steel ingots and 3.450 MTs of steel runners and risers a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng imposition of penalty. The adjudicating authority rejected all the defence of the appellants and confirmed the demand and also imposed penalties as indicated earlier. Hence, these appeals. 4. We have heard Shri R. Swaminathan, learned Consultant and Shri Vimal Sethi, learned DR. 5. The appellants mainly stress the following points : I. There was no shortage of 19.735 MTs of steel ingots and 3.450 MTs of steel runners and risers in their RG 1, since the quantity of shortage is not based upon physical verification but merely on an estimation. II. The two packet ledger seized from the assessees on 13-1-1989 do not contain only the official accounts; but they are personal diaries of Shri L.N. Garg and contained entries of sale and purchase carried out by him on a commission basis privately, in addition to entries of some transactions of M/s. Surendra Alloys. III. The loose papers seized on 13-1-1989 from the premises of the assessee s factory were actually personal papers of Shri L.N. Garg. IV. There was no manufacture and clearance of the excisable goods as held by the adjudicating authority. V. The demand is time barred as there was no suppression and hence the exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission Agent and received commission. The details of MS scrap purchased by Surendra Alloys but not accounted for in their Form IV register for the period 1-10-1988 to 13-1-1989 are contained in Annexure-XVI to the show cause notice (page 155 of the paper book). The annexure is reproduced below (at page No.11). At page 186 of the paper book is a list of purchases of MS scrap made by the notices and entered in Form-IV register for which there is no reference in the diaries of Shri L.N. Garg. This list is reproduced below (at page No. 12 and 13). The statement of purchase of scrap monthwise for the disputed period is set out at page 188 from which it will be seen that the details of scrap and transactions not covered by the diaries is to the extent of 55.5% to 60.6%. The statement is reproduced below (at page 14). The appellants submit that if the diary is taken to represent only the accounts of M/s. Surendra Alloys then the stock of scrap should have been around 1000 MTs i.e. alleged purchases (details of which are found at page 155) less production (details at page 156) i.e. 3187 MTs - 2276 MTs while only 100 tonnes of scrap was actually found. A reference to some of the entries ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes and consequently the entries at page 156 are to be construed as 18 quintals and 94 kgs. and 1.2 quintals and 1 kgs. One of the basic submission of the appellants before the adjudicating authority was that the consumption of electricity required for manufacturing the alleged disputed quantity was very high and that the consumption for the alleged quantity comes to only 200 Units per metric tonne whereas the minimum requirement under ideal condition is around 600 units per metric tonne and this ratio was corroborated by a certificate from an expert on Induction Furnace (Certificate dated 10-10-1990 from M/s. S.K. Consultants at page 194). This submission has been rejected by holding that there is mis-use of electricity by Induction Furnace owners which cannot be ignored. We agree with the appellants that this cannot be a ground for rejecting the appellant s submission on this point, particularly noting that during the relevant period, there is no such charge of electricity theft against the appellants by DESU and no demand therefrom. The adjudicating authority has taken into account whatever has been entered independently in the statutory records inspite of these transactions not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 S.No. Name of Supplier Quantity in M.T. Relevant document 6. Janardhan 111.135 - do - Page 13 7. S.R. 23.520 - do - Page 14 8. Jiyalal 235.200 - do - Page 19 9. Jiyalal 32.830 - do - Page 20 10. Chand 129.970 - do - Page 23 11. Rattan 95.030 - do - Page 25 12. Ramesh 177.605 - do - Page 26 13. Subash 75.825 - do - Page 27 14. Anil Gupta 49.805 - do - Page 28 15. Prem Gupta 56.335 - do - Page 29 16. Kumar 98.795 - do - Page 30 17. Bajaj 8.670 - do - Page 31 18. B.D. 20.725 - do - Page 32 19. R.P. Dewan 76.800 - do - Page 33 20. Vikas 14.605 - do - Page 34 21. Ramesh 140.090 - do - Page 36 22. Rajinder Goel 18.580 - do - Page 37 23. Jagarnath Aggarwal 54.910 - do - Page 38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Do 24. 15-660 Do 25. 18 18-12-1988 2-330 Do 26. 23-12-1988 10-340 Alliance Enterprises 27. 27-12-1988 11-090 Geetanjali Steels 28. 10-950 Do 29. 28-12-1988 11-950 Do 30. 30-12-1988 15-255 Orient Trading Co. 31. 19 1-1-1989 5-860 Aliance Enterprises 32. 3-1-1989 9-510 J.M.C.Industries 33. 5-1-1989 10-230 Orient Trading Co. 34. 11-1-1989 9-740 Jaipur Metals Electronics Ltd. 35. 13-1-1989 8-730 Do 36. 13-860 Do 37. 2-160 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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