TMI Blog2009 (7) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... Baig, DR, for the Respondent. [Order per : Justice R.M.S. Khandeparkar, President (for the Bench) (Oral)]. Since common question of law and facts arise in all these applications, they are heard together and are being disposed of by this common order. In appeal Nos. 1359 and 1360 of 2009 the appellants challenge order passed by the Commissioner on 12-3-09 whereas in Appeal Nos. 1361 and 1362 of 2009, the appellants challenge the order dated 3-3-2009. Under the order dated 12-3-09, the duty demanded was sum of Rs. 2,88,00,377/- whereas under the order dated 3-3-2009, the duty demanded was Rs. 1,60,85,657/-. The duty was demanded along with interest and also equal amount of penalty was imposed. As far as the Director is concerned, in the order dated 12-3-09, he has been subjected to penalty of Rs. 25 lakhs whereas under the order dated 3-3-09 the penalty of Rs. 10 lakh has been imposed upon the Director. The order dated 12-3-09 relates to the period from May, 2003 to September, 2006 and the order dated 3-3-09 relates to the period from April, 2003 to September, 2006. In the former case, a show cause notice was issued on 19-5-2008 whereas in the later case it was issued on 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant. Besides the investigation also revealed utilisation of superior quality of raw materials during the relevant period which would otherwise result in decrease in electricity consumption. However, the facts on record revealed excessive consumption of the electricity during the relevant period and there is no explanation forthcoming in that regard from the appellant. He further submitted that in view of clandestine production and removal of goods, the authorities were justified in invoking the extended period of limitation. 5. It is pertinent to note that we are at the stage of hearing of the stay application and, therefore, the scope of inquiry in relation to the merits of the case is limited to find out the prima facie case, if made out, by the appellant for grant of waiver in relation to pre-deposit in terms of Section 35F the Central Excise Act, 1944. Bearing the same in mind, if one peruses the impugned order the same discloses findings regarding duty liability of the appellants based upon the analysis of all materials on record. Being so, the contention regarding absence of corroborative piece of evidence is totally devoid of substance. If the authority has refuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also devoid of substance, besides being the fact that in case of clandestine production and removal, the department is entitled to rely upon such documents bearing in mind the decision of the Supreme Court in Triveni Rubber and Plastics case that such evidence can form basis to ascertain the duty liability in such cases to manufacture. 9. The contention of the learned advocate for the appellant that the said decision was given in totally different set of facts and not relevant, cannot be accepted in view of clear observations of the Apex Court in the said decision that we cannot agree that the officers empowered by the Collector or Collector cannot determine the normal production unless all the factors mentioned are present simultaneously . The Apex Court was referring to Rule 173E of the Central Excise Rules which reads thus: Rule 173-E. Determination of normal production. - Any Officer duly empowered by the Collector in this behalf may fix the quantum and period of time when the production in the assessee s factory was considered normal by such officer having regard to the installed capacity of the factory, raw material utilisation, labour employed, power consumed and su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by State of Rajasthan and contending that the production of M/s. Shree Sharma Steel Rolling Mills (P) Ltd. was from ultra modern imported machinery with minimum requirement of operation whereas the factory of the appellants being manually operated is of no help, there was no other material placed before the adjudicating authority to disbelieve the contention that excessive consumption of electricity discloses clandestine manufacture and removal of the goods from the factory. It is also pertinent to note that it was their own case that there was consumption at the rate of 150 units to 289 units per MT during the relevant period and there is no explanation for such a wide variation in units per MT. All these factors taken together, the authorities have arrived at the finding of duty liability of the appellant. We do not find any prima facie case being made out in support of the contention that the findings are not based on tangible evidence. 12. The decision of the Apex Court in Oudh Sugar Mills case was in the peculiar facts of the said case. Therein, it was in relation to the production of sugar and calculation in that regard was purely based on some assumption. The Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra s report. (ii) 1800 KWH/T as per the report by Joint Plant Committee constituted by the Ministry of Steel, Government of India. (iii) 1427 KWH/T as per the report of NISST, Mandi, Gobindgarh given in June-July, 2006. (iv) 650 units to 820 units/MT as per the Executive Director, All India Induction Furnace Association, New Delhi. (v) 831 units/MT in the case of Nagpal Steel v. C.C.E., Chandigarh reported in 2000 (125) E.L.T. 1147. Considering the same, the Tribunal observed that no experiments had been conducted in the factories for devising the norms of consumption of electricity for production of steel ingots. It was basic philosophy in the taxation matters that no tax can be levied on the basis of estimation. In that case, there was added problem in the sense that estimation of production fluctuates widely depending upon the fact as to which report has to be adopted. It was clearly observed that unless the manufacture of the steel ingots is proved to the hilt by authentic, reliable and credible evidence, duty cannot be demanded on the basis of hypothesis and theoretical calculations, without taking into consideration the ground realities of the func ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for stay, the appellants have listed as many as 51 reported judgments claiming that the same disclose strong case in favour of the appellants. Initially, the learned advocate for the appellants has expressed desire to refer to all those 51 reported judgments. However, when very first decision therein in the matter of Doyang Tea Estate v. CCE, Shillong [2005 (186) E.L.T. 342], was referred to, it was stated by the advocate himself that the said decision is not applicable to the facts of the case in hand. Thereupon the learned advocate fairly conceded that it would not be proper for the appellants to rely upon those decisions in the stay application and submitted that the appellants do not want to rely upon any of those decisions in support of their contentions. 17. In Chola Spinning Mills (P) Ltd. case, the Tribunal held that duty liability cannot be fixed solely on the basis of third party s records without any corroboration of such records. There can hardly be dispute on this proposition of law. As already seen above that the duty liability of the appellant has not been fixed on the basis of records in relation to proceedings pertaining to Nirmal Inductomelt Pvt. Ltd. or mere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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