TMI Blog1999 (7) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the Order-in-Original passed by the Collector on 15-12-1992. While directing de novo adjudication of the matter, the Tribunal had observed, following its earlier decision in Premier Packaging (P) Ltd. v. C.C.E., New Delhi [1986 (26) E.L.T. 333 (Tribunal)], that Rule 9 of the Central Excise Rules, 1944 would apply where it is shown that excisable goods have been removed without payment of excise duty leviable thereon. However, to substantiate the charge under Rule 9, it was also necessary that evidence of clandestine manufacture and of surreptitious removal should be established. The Tribunal had observed that no finding had been given in the impugned order about surreptitious removals viz., the mode/manner in which the goods had been disposed of. The adjudicating authority had not made any enquiries from any independent source about the average consumption of electricity, correlation of the production data about electricity consumed in other units similarly placed, etc. The Tribunal therefore directed that where there is unexplained large variation in respect of consumption of electricity and corresponding production of the final product, a test run should have been got done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for including the consumption of electricity per unit of production. Further, onus of proving clandestine removal of excisable goods was on the Revenue. In the absence of any evidence to show the manner of removal, the onus has not been discharged by the Revenue. The Show Cause Notice (SCN) itself had also not made any allegation that any additional inputs had been received in the factory and excisable goods had been produced out of the same and therefore production had not been accounted for. In fact, there had not been any finding to the effect that actual production was not reflected in the RG 1 Register for any part of the period either in the case of ingots or runners and risers. This further went to show that the demand of duty raised in the SCN is based entirely on power consumption which was untenable. Ld. Counsel further submitted that invoking of the extended period of limitation was wholly unsustainable since the jurisdictional Excise Officers had been visiting the appellants factory from time to time and verified and certified as correct, the records of production, input, output as well as clearances. It cannot therefore be claimed that activities of the appellants we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds of the SCN and the impugned order being themselves liable to be set aside as untenable, penalty imposed would not survive and therefore liable to be set aside and quashed. 5. Ld. SDR Shri Satnam Singh defending the impugned order submitted that the Commissioner had dealt with each and every aspect of the matter in detail after giving opportunity to the appellants of being heard. He referred to the observations made in Paragraph 12 of the impugned order in which the evidence contained in the two slip pads relied on by the Department had been examined. The statements of S/Shri Nasib Singh and Rajendra Prasad had been examined and both of them, being employees of the appellants, had admitted to the veracity of the production in the appellants factory for the relevant period and there was no deviation at the time of their cross-examination. The entries in slip pads dated 3-10-1990 were found to be correlated with the entries in the seized Register. As regards compliance of the Tribunal s direction for conducting a study to find out the correlation of production with consumption of electricity in other units similarly placed, a study was conducted in furnace units/arc units. Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants factory, only 108.130 M.Ts of scrap had been duly accounted by the appellants and for the remaining quantity of scrap, the statements made by the drivers of the trucks had been relied on. 6. Ld. SDR thereafter referred to Paragraph 19 onwards of the impugned order in the present appeal wherein the Commissioner had discussed the evidence before him and the reasons for coming to his conclusions. On the question of reliability of the contents of the private records and slip pads relied on by the Department, the Commissioner had noted that the said records had been maintained by Shri Nasib Singh, Store Keeper, and Shri Rajendra Prasad and Shri B.B. Eswar, employees of the appellants firm. They have admitted to the recovery of the said private records as well as to the fact of their having written the said private records. In the de novo proceedings, the appellants had not adduced any evidence to show that the said records were maintained without authority or that they could not be relied upon. On the other hand, the said private records reflected the actual production. This was borne out by the fact that at several places, the figures tallied exactly with the figures of produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The order may therefore be upheld and the appeal rejected, submitted by the ld. SDR. 7. We have given due consideration to the arguments advanced by both sides and have perused the record. The impugned order is an order passed by the Commissioner in a de novo adjudication pursuant to the directions given by the Tribunal. Appellants have contended that the Commissioner has failed to comply with the directions contained in the remand order. The main allegation against the appellants is about clandestine production and removal of steel ingots on the basis of average consumption of electricity. The Tribunal had directed that a test run should be conducted in the appellants unit for a set period and a norm adopted for arriving at the actual production. In paragraphs 28 34 of the impugned order, the Commissioner has discussed the methodology adopted by him for arriving at the norm. Consumption of power of three units in Ludhiana using arc furnaces was assessed on test run basis and the average consumption of electricity per tonne was found to be varying from 1074 to 1371 in the case of Mukesh Steels to 800 to 862 in the case of Antarctic Industries. The test run in the case of appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulabchand v. U.O.I. [1992 (59) E.L.T. 235 (Guj.)]. We find that though the Commissioner has shown that he has complied with the direction for conducting of test run, there is still a very wide gap between the norm of 703 units per M.T. adopted by the Commissioner and 840 units based on statutory records and corresponding electricity bill for the period 23-6-1990 to 22-7-1990. Even assuming that the private records by way of weighment slips and octroi receipts for receipt of raw materials have not been controverted by the appellants, we find that the other directions of the Tribunal order such as evidence of clandestine removal/disposal, cogent reasons for adopting the figures of production and correlation between private records and octroi receipts have not been clearly brought out in the impugned order. In the absence of clear findings on these aspects, even going by the yardstick of reasonable degree of probability, we find that the material relied on by the Commissioner falls short of the required degree of proof. As has been so often held by the Courts, suspicion, however strong, cannot be a substitute for proof. [Babu Singh v. State of Punjab - (1963) 3 SCR 749]. 8. In the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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