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TMI Blog2010 (3) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... h 4 show cause notices as detailed below : Sl. No. SCN No. and date Period covered Duty demanded 1. V(17)171-Dem/96/2020 dated 20-9-96 April, 96 to June , 96 Rs. 6,06,020/- 2. V(15)198-Dem/96/2319 dated 1-11-96 July, 96 to September, 96 Rs. 3,62,952/- 3. V(15)36-Dem/97/371 dated 3-2-97 Oct. 96 to Dec. 96 Rs. 80,387/- 4. V(15)210-Dem/97/1409 dated 25-6-97 Jan, 97 to April, 97 Rs. 4,64,630/- Total Duty Demanded Rs. 15,13,989/- The basis for issue of the show cause notices was the order passed by the Collector, Kanpur in respect of M/s. Alfa Castings Pvt. Ltd. treating average electricity consumption per M.T. of M.S. ingots as 1000 units and demanding differential duty of ascertained unaccounted product. The original aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice amounting to Rs. 6,06,020/- and he also confirmed the demand of Rs. 40,649/- relating to the period January 1997 to April, 1997 as against the proposed demand of Rs. 4,64,630/-. He also imposed penalties on the appellant. The order of the original authority stands upheld as far as the demand of duty was concerned but the penalty was reduced to Rs. 90,000/-. 4.1 Learned Advocate appearing for the appellants assails the impugned orders on various grounds. He submits that their unit was started in 1994; no specific investigation was conducted by visiting their unit or by conducting any test in their factory; initially, show cause notice was issued treating 1000 units per M.T. of M.S. ingots as the; norm and later on, on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tantially. If the raw materials are of poor quality then the power consumption goes up. All these changes are applicable even in respect of the activities in the same factory premises. 4.5 In view of the above, to compare the electricity consumption of another unit which itself was having varying consumption pattern was not justified. 4.6 He also submits that no other evidence such as procurement of other raw materials, the man-power deployment, private records indicating any excess production or any evidence of clandestine removal has been relied upon. Under there circumstances, the findings of excess production and clandestine removal are based purely on assumption and presumption. He also relies on the decision of the Tribunal vide Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alculated on the basis of average consumption of electricity is in order. He also relies on the decision of the Tribunal in the case of L. Kant Paper Mills (P) Ltd. v. C.C.E., Kanpur reported in 1999 (109) E.L.T. 585 to contend that the power consumption is a valid factor In order to determine the quantum of production. 6. I have carefully considered the submissions from both sides. A reading of the show cause notices reveals that serious charges of unaccounted production and clandestine removal has been made merely based on the order dated 29-2-1998 passed by the Collector (presently known as Commissioner) in the case of Alfa Casting Pvt. Ltd. No evidence like variations in respect of other inputs or records relating to alleged unaccounte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsumption of electricity in another unit, by making serious allegation of suppression of production or clandestine removal without any corroborative evidence. 7.1 It is submitted across the Bar that the unit is closed since last several years and therefore, the question of conducting any experiment on the unit at this stage also does not arise. 7.2 The reliance placed on the decision of the Hon'ble Supreme Court in the case of Triveni Rubber and Plastics is misplaced. The said decision related to interpretation of Rule 173E of Central Excise Rules which reads as under : "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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Casting Pvt. Ltd. which was done at the instance of the Tribunal. 8.1 The investigation in this case can at the best be considered as halfhearted. The show cause notices making serious allegation were not founded on any worthwhile evidence. 8.2 As rightly pointed out by the learned Advocate for the appellants, the Tribunal in the case of U.P. Alloys Pvt. Ltd. has upheld the power consumption at 1100 units per MT which was based on test conducted in the said factory. In other words, based on test conducted at U.P. Alloys Pvt. Ltd. 1100 units per MT has been adopted for demanding duty on excess production and in the case of Hans Casting Pvt. Ltd. the average consumption has been based on experiment conducted in the said unit. Undisput ..... X X X X Extracts X X X X X X X X Extracts X X X X
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