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2015 (10) TMI 2351 - CESTAT NEW DELHI

2015 (10) TMI 2351 - CESTAT NEW DELHI - TMI - Duty demand - Clandestine removal of goods - Demand on the basis of electricity consumption - Held that:- Admittedly the search was conducted in the factory premises of the assessee on 30.3.2007 and certain records were seized which pertained for the period January, 2007 to March, 2007. The departmental officers without doing any other exercise, compared the clearance during that period for electricity consumption and made the basis to determine the .....

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t sustainable - demand on the basis of electricity consumption to manufacturer the cement for whole of the period is not sustainable. We further found that during the course of investigation, certain documents were resumed and on the basis of those documents, electricity consumption was derived, the same was made basis of demand which is set aside. - only basis for the demand of duty is electricity consumption but no comments have been made by the adjudicating authority to demand on the basis of .....

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co-noticees to the show cause notice as well as Revenue are in appeals against the impugned order. 2. The brief facts of the case are that the M/s. Satguru is the main party who is manufacturer of Ordinary Portland Cement (OPC). On 30.3.2007, a search was conducted by Director General Central Excise Intelligence wherein statement of Director Shri Badrilal Bansal, Manager Shri Dharmaendra Goyal were recorded. Certain loose papers for the period January, 2007 to March, 2007 were also received and .....

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cleared 46744 MT of cement without payment of duty. Therefore, a show cause notice was issued to demand the duty for the period February, 2006 to March, 2007 by applying the formula to say that for production of 1 MT of cement 74 units of power is required, hence M/s. Satguru has cleared clandestinely cement to the tune of 46744 MT without payment of duty. Consequently, the demand of duty was proposed to be confirmed amounting to ₹ 1,72,27,997/-. The show cause notice was adjudicated and r .....

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ri R K Bajaj. M/s. Satguru along with co-noticees are in appeals against the said part of the order and Revenue is in appeal against the dropping of demand proposed in the show cause notice. Hence, all the parties are before us. 3. As issue involved is common and all the appeals are arising out of common order, therefore, the same are disposed of by a common order. 4. Shri K K Anand, learned Counsel for the parties appeared before us and submits that prior to impugned proceedings, a search was a .....

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nt is 228 units. Another Chartered Engineer, Shri K M Thombre also inspected the factory and issued a certificate dated 7.3.2006 to certify that power consumption of electricity to manufacturer 1 MT of cement is 231.39 units. Another Chartered Engineer, Shri Akhilesh Pandit also inspected the unit and issued a certificate dated 14.3.2006 and certified that electric energy required for production of 1 MT cement is 230.85 unit. In those proceedings, the Commissioner after relying upon the above ce .....

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ment of Madhya Pradesh Enterprises with regard to installed capacity of M/s. Satgurus unit and about the power consumption required to manufacture cement. They visited their factory on 9.3.2010 and certified that power consumption of the plant was 212.29 units per ton of cement and the annual capacity of the plant was 29280 MT per annum. He also stated that detailed energy audit of SCPL Jeerabad, Dhar of the appellant unit was conducted by Centre of Energy Studies and Research in February, 2008 .....

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9 units as per the report and arrived at a decision that requirement of 155 units of power to manufacture per MT of cement is appropriate and adjudicated the matter. The said order was challenged before this Tribunal wherein this Tribunal has set aside the demand confirmed on the basis of electricity consumption on average basis. He further submits that as in the show cause notice the demand is based on the electricity consumption, the same is not sustainable. Therefore, impugned order is to be .....

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ues basic contention is that learned Commissioner has erred in taking the average consumption of electricity for production of 1 MT of cement. Infact their ground is that as documents seized during the course of investigation corroborates electric consumption of 74 units for manufacture of 1MT of cement, has been ignored by the learned Commissioner to demand duty. Therefore, Revenues main contention is that electricity consumption of 74 units for manufacture of 1MT cement is to be considered, .....

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electricity consumption corroborates the fact of clandestine removal of cement from their factory. In these circumstances, the impugned order is to be modified and the duty be demanded as proposed in their show cause notice. 7. Heard the parties. Considered the submissions. 8. In this case, admittedly the search was conducted in the factory premises of the assessee on 30.3.2007 and certain records were seized which pertained for the period January, 2007 to March, 2007. The departmental officers .....

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is Tribunal vide Order No.52006 52008/2015 dated 25.06.2015, this Tribunal has held that demand on the basis of electricity consumption is not sustainable by observing as under: 6.5. The revenue in its appeal mainly questions the Commissioners findings regarding the power consumption norm being 155 Units per M.T. But there is nothing in revenues appeal to explain as to how the power consumption norm of 72.36 unit per M.T. determined by the investigating officer is correct, when the study condu .....

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nvestigation at that time also, on comparison of power consumption and the actual production during January 2007 to March, 2007, the power consumption ratio was found to be 74 unit per M.T. which is close to the figure arrived at 72.36 Unit per M.T. However, it has not been explained in the Revenues appeal as to on what basis the ratio of 74 Units per M.T. had been determined. It is well settled law that merely on the basis of power consumption norm and that too when there are serious doubts ab .....

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. 9. While arriving at the said decision, this Tribunal relied on the decision of this Tribunal in the case of R A Castings Pvt. Ltd. vs. CCE Meerut I reported in [2009 (237) ELT 674 (Tri-Del)] which was confirmed by Allahabad High Court reported in [2011(269) ELT 337(All)] which was further confirmed by Hon ble Apex Court reported in [2011 (269) ELT A 108 (SC)]. Therefore, we hold that demand on the basis of electricity consumption to manufacturer the cement for whole of the period is not susta .....

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