TMI Blog1999 (7) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... the seized textiles were liable to confiscation and directed that cash security taken for their provisional release be appropriated. He ordered confiscation of plant, machinery etc. and prescribed a fine for their redemption. As regards the duty evaded the show cause notice did not mention the amount but merely prescribed the period and mentioned the quantity of fabrics allegedly clandestinely cleared. The Collector however in the impugned order made the initial computation at Rs. 35,62,365.75. He found that the period September, 1979 to June, 1980 fell beyond the extended scope of the show cause notice. Dropping the demand for that period, he confirmed the demand for Rs. 32,01,123.57. The present appeal is against this order. 2. Shri Willingdon Christian, learned Advocate appearing with Shri Mayur Shroff, Advocate, stated that the basic Excise duty was not leviable on processed man-made fabrics but what was leviable was the Additional Duties of Excise imposed under Section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. He stated that the Delhi High Court in their judgment in the case of Pioneer Silk Mills v. U.O.I. - 1995 (80) E.L.T. 507 had held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was justified in ordering confiscation and imposing penalties. 5. We have carefully considered the rival submissions. 6. We shall first deal with the issue of liability to confiscation of the man-made processed fabrics as also the liability to penalty on the persons rendering such goods liable to confiscation. 7. Man-made processed textile fabrics were exempted from basic duty of Excise but attracted additional duties of Excise in terms of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. Section 3(3) of that Act prescribed that the provisions of the Central Excises and Salt Act, 1944 and the Rules framed thereunder would apply in relation to levy and collection of the additional duties of Excise. In the cited judgment the Delhi High Court held that the construction of the section did not permit inclusion of those provisions of the Central Excises and Salt Act which related to confiscation and penalties. On this ground it was ruled that in the petition before them the orders of confiscation and imposition of penalty could not be upheld. Against this judgment the Government of India had filed an SLP to the Supreme Court. 8. In the Maheshwari Mills case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had determined the norms for production. Rule 173E prescribes that such production be determined on examination of several parameters. The listed parameters are (1) installed capacity of the factory, (2) raw material utilisation, (3) labour employed, and (4) power consumed. The rule itself provides for additional factors being taken into account as are considered relevant by the officer entrusted with such determination. The normal quantum of production is to be determined over a period of time when the production in the factory was considered as normal. Once the norm is fixed the assessee can be called upon to explain any shortage as compared to the norm. If the shortfall is not accounted for the officer is free to assess the duty to the best of his judgment after giving the assessee a reasonable opportunity of being heard. The rule itself provides for re-determination of the norm on any of the underlined factors being changed. For this also the assessee has to be given an opportunity to be heard. 11. It is the submission of Shri Ashokan that the norm so determined is not only available for the future production but that it can be used to check the adequacy of the production dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made retrospectively. 15. Even if it is to be held that the rule did have retrospective application, it remains to be seen whether the determination made by the officer was in terms of the provisions of this rule or not. As we have observed above the rule lists certain factors to be taken into account when determining the norms. Consumption of electricity is only one of the factors. It is the submission of Shri Willingdon that the Superintendent assigned the job relied only on one parameter and that is the consumption of electricity and due to this the exercise itself was defective. The show cause in paragraph 17 makes the following averment :- "17. It further appears that the officers on the basis of production of man-made fabrics recorded in the private records as well as statutory records and on the basis of units of electricity consumed having direct bearing with the production in any unit, worked out the ratio of production in terms of L.mtrs. with reference to power consumption in terms of unit for the period from July, 1983 to January, 1984, being a normal base during which the electricity energy consumption and production appeared normal. The ratio of production so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imself has cited a judgment of the Tribunal in justifying him dependence on the single parameter [Premier Rubber Products v. C.C.E. - 1992 (62) E.L.T. 56]. The Tribunal had given a caution in the cited judgment and that is in view of unexplained large variation in the consumption of electricity and corresponding production, the best course was to make a test-run production in the unit for a specified period noting the production and consumption of electricity and then basing the norm thereupon. The order of the Collector does not suggest that this was followed. Shri Willingdon cites the Tribunal judgment in the case of Padmanabh Dyeing . Finishing Work Anr. v. C.C.E. [1997 (90) E.L.T. 343 (Tribunal) = 1996 (16) RLT 410] in which in identical circumstances the Tribunal held that charge of clandestine removal based on electricity consumption alone without any corroborative evidence was not sustainable. The ratio of this judgment would apply fully to the facts before us. On this analysis it must be held that the demand amounting to Rs. 32,01,123.57 does not sustain. 24. In the result the appeal is allowed in part. The confirmation of demand to the extent of Rs. 15,97,629.07 is up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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