TMI Blog2015 (7) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... generation of electricity from D.G. sets. Merely on the basis of power consumption norm and that too when there are serious doubts about its correctness, duty demand cannot be confirmed against an assessee, when there is no other corroborative evidence of unaccounted purchase of raw-material and clearance of unaccounted production. In view of this, we hold that the duty demand for the period from 01.04.2001 to 31.03.2004 based on the power consumption norm is not sustainable and set aside. However, the duty demand of ₹ 16,57,293/- for the period from 01.04.2004 to 27.10.2004 alongwith interest and equivalent penalty under section 11AC is upheld. - Decided partly in favour of assessee. - Excise Appeal No.E/2352 & 2353/2010-EX[DB], Excise Appeal No. E/2995/2010-EX[DB] - Final Order No. 52006-52008/2015 - Dated:- 25-6-2015 - Hon ble Mr. Rakesh Kumar, Member (Technical) And Hon ble Mr. S. K. Mohanty, Member (Judicial),JJ. For the Petitioner : Shri. K. K. Anand, Advocate, Ms. Surabhi Sinha, Advocate For the Respondent : Shri. M. S. Negi, DR ORDER Per: S. K. Mohanty 1. The facts giving rise to these three appeals are, in brief, as under:- 1.1 M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly, another transporter M/s. Ashish Bhadari of M/s. Mahaveer Transport, Rajgarh (Dhar), also confirmed having provided Trucks to the appellant company. Further, statement of Shri Darmendra Goyal was recorded, wherein he was confronted with the ledger seized from the office premises of the appellant company at Indore and he explained the ledger entries and confirmed that the same pertained to the various transactions during the period from 01.04.2004 to 27.10.2004. 1.3. The statement of Shri Jagdish Agarwal, Director of the appellant company was recorded wherein he stated that the installed capacity of the cement plant was 200 M.T. per day and that the payments against sale of cements had been received by cheque as well as cash the details of which were entered in the ledger in the cash book seized from their office. As per the entries in the ledger for the period from 01.04.2004 to 18.10.2004, 2,35,910 bags (11795.MT) of cement valued at ₹ 2,35,14,800/- had been cleared. Besides this, as per the entries in the note book seized from the office during the period from 19.10.2004 to 26.10.2004, 276 M.Ts. cement had been removed. Thus, total sale of cement during the period f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest under section 11 AB on the above mentioned duty demand. While he imposed penalty of ₹ 15,64,359/- on the appellant company under section 11AC, another penalty of ₹ 1,00,000/- was imposed on Shri Jagdish Agarwal, Director of the appellant company under Rule 26 of the Central Excise Rules, 2002. 1.6. Against the above order dated 30.06.2006 both the appellant as well as Revenue filed appeals before the Tribunal. The appeals filed by the appellant company and its Director Shri Jagdish Agarwal and the appeal filed by the Revenue were disposed of by the Tribunal vide final order No.1258-1261/09-EX dated 27.11.2009 by which the matter was remanded to the Commissioner for denovo adjudication. The Tribunal directed the Commissioner to decide the matter afresh after granting reasonable opportunity of personal hearing. 1.7. In denovo adjudication proceedings, the matter was decided by the Commissioner vide order in original No.15/COMMR/CEX/IND-2010 dated 5/5/2010. By this order with regard to the duty demand of ₹ 16,57,293/- based on the entries in the note-book and ledger book seized from the Office for the period from 01.04.2004 to 27.10.2004, the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the power consumption in the appellant s cement plant is 212.39 units per M.T.; that earlier on 23.02.2006 Shri Prakash Chandra Jain, a Chartered Engineer, had visited the appellant factory and according to his study, the power consumption was 228 Units per M.T. and subsequently, on 07.03.2006 another Chartered Engineer Shri. K.M.Thompre had visited the appellant s unit and according to his study the power consumption was 231.39 Units per M.T., that the power consumption norm of 212 units per M.T. determined by the Centre of Energy Studies Research is in accordance with the power consumption norm in respect of the appellant cement plant determined earlier by two other Chartered Engineers; that when the Department itself had appointed Centre of Energy Studies Research to study the power consumption in the appellant s cement plant and that Institute determined the power consumption as 212 Units per M.T., there was absolutely no justification for the Commissioner to discard the report of the Centre of Energy Studies Research and arbitrarily adopt the power consumption norm of 155 units per M.T. on the basis of alleged use of DG set for power generation; that as on 01.04.2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer consumption assailed the part of the order dropping the duty demand of ₹ 1,18,40,899/- and in this regard, he reiterated the grounds of appeal in the Revenue s appeal. He pleaded that in respect of the period from 01.04.2001 to 31.03.2004 there were evidences of the transporter which showed that the appellant were indulging in clandestine removal; and, therefore, the Investigating Officers had correctly determined the actual production for this period on the basis of power consumption norm of 72.36 units per M.T. He also pointed out the statement of Shri Akhil Surve, Manager (Production) of the appellant company who had accepted the power consumption of 72 Units per M.T. Shri Negi, therefore, pleaded that in respect of the period from 1st April 2001 to 31.03.2004, the entire duty demand as made in the show cause notice should have been confirmed as for this period the power consumption norm of 72.36 units per M.T. has been correctly determined by the Investigating Officers. 5. We have considered the submissions from both the sides and perused the records. The duty demand of ₹ 16,57,293/- for the period from 01.04.2004 to 26.10.2004 is based on the entries in ledg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this period and the under reported production has been cleared clandestinely without payment of duty. For this purpose Investigating officers estimated the actual production for the period from 01.04.2001 to 31.03.2004 by dividing the power consumption during this period by 72.36 as, according, to investigating officers in the appellants cement plant 72.36 units of electricity is required for production of 1 M.T. of cement. 6.2. The basis for the power consumption norm of 72.36 Units per M.T. is that during the period from 01.04.2004 to 29.09.2004, the production in the cement plant of the appellant company was 10346.5 M.Ts. and their power consumption during the same period was 748710 Units and, accordingly, by dividing 748710 by 10346.5 the Officers have come to the power consumption norm of 72.36 units of electricity per M.T. of cement produced. The contention of the appellant, however, is that during the period 01.04.2004 to 29.09.2004 the production of cement was much less and that the investigating officers have taken the quantity of clearance of cement during this period as the quantity of production of this period. which is not correct, as the quantity of clearances incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s mistake as the ledger entries are about the sale of the cement. Thus, the figure of 10718.5 M.T. for the period from 01.04.2004 to 29.09.2004 is the figure of sale of cement during this period and not of production. It cannot be assumed that 10718.5 M.Ts. cement sold during this period had necessarily been produced during the same period, as the cement sold during this period could be out of the stock manufactured during the period prior to 01.04.2004 also. 6.4. The question then arise is as to what is the correct power consumption ratio. We find that in this regard the department itself had got a study conducted through the Centre of Energy Studies Research in March, 2010 and an Officer of this Institute after visiting the Unit alongwith the Jurisdictional Range Superintendent and Range Inspector had given a report dated 16.03.2010 that their power consumption is around 212 Unit per M.T. This power consumption ratio compares favourably with the power consumption ratio determined by two other Chartered Engineers Shri K.M. Tompre and Shri Prakash Chander Jain. When the Department itself had appointed the Centre of Energy Studies and Research for carrying out a survey of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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