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2015 (12) TMI 253 - CESTAT NEW DELHI

2015 (12) TMI 253 - CESTAT NEW DELHI - TMI - Waiver of pre deposit - Duty demand - Denial of CENVAT Credit - Fraudulent credit - Bogus invoices - under reported the production of copper rods by inflating the power consumption - Held that:- Tribunal in respect of the case against M/s V.K. Metal Works has vide stay order has waived the requirement of pre-deposit of the duty demand, interest and penalty and had stayed its recovery by taking a prima facie view that the above-mentioned allegation aga .....

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nufacturing process resulting in cooling of furnace which requires more consumption of power for re-heating. Prima facie, we find that these factors have not been considered and the Commissioner has arbitrarily adopted the power consumption figure of 346 units per MT as the norm for the entire period. In our prima facie view estimating production on this basis would not be correct when there is absolutely no evidence of unaccounted purchase of raw material. - Stay granted. - Excise Stay Applicat .....

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ings Pvt. Ltd., 520A, G.T. Road, Shahdara, Delhi - 110 095 (hereinafter referred to as appellant company) are engaged in manufacture of copper rods from copper ingots by rolling process. Shri Sushil Kumar Jain is the Director of the appellant company. The period of dispute in this case is from 2005-2006 to 2007-2008. There are two allegations against the appellant company. The first allegation is that during the period of dispute they have taken Cenvat credit of ₹ 5,50,50,489/- on the basi .....

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MT and according to the Department, their correct power consumption norm is 346 units per MT. The Department accordingly has divided the power consumption during period from 2005-2006, 2006-2007 and 2007-2008 by 346 and on this basis has estimated production of copper rods and after excluding the production recorded in the RG-1 register the duty has been demanded on the balance amount quantity. The duty demand of ₹ 32,06,93,486/- is on this basis. The matter was adjudicated by the Commiss .....

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he also imposed penalty of ₹ 4 crore on Shri Shushil Kumar Jain, Director of the appellant company under Rule 26 of the Central Excise Rules, 2002. Against this order of the Commissioner, these appeals have been filed alongwith stay applications. The miscellaneous application has been filed by the Department for early hearing of the stay application. 2. Heard both the sides in respect of stay applications. 3. Shri B.L. Narasimhan, Advocate, the learned Counsel for the appellant, pleaded t .....

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of Notification No. 56/02-CE and recovery of duty of ₹ 42,37,24,451/- from them, that in this regard the Commissioner, Central Excise, Jammu vide order-in-original dated 16/11/12 had confirmed the above-mentioned duty demand against M/s V.K. Metal alongwith interest and had imposed penalty on them, that in respect of the appeal filed against the Commissioners order dated 16/11/12 before the Tribunal alongwith stay application, the Tribunal vide stay order No. 50836-50839/2015 - EX (BR) d .....

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also be waived and its recovery stayed, that as regards the duty demand of ₹ 32,06,93,486/- against the appellant by inflating the power consumption, the power consumption norm of 346 units per MT of rolled product has been arbitrarily adopted, that in the case of appellants units the power consumption has varied from 346 units to 349 units and the reason for this variation are fluctuation in the voltage, breaking the continuity in production process and resulting cooling of hot metal ti .....

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ower consumption the allegation of duty evasion by taking recourse to under reporting of the production cannot be made, that in this regard he relies upon the judgment of Honble Allahabad High Court in the case of RA Casting Pvt. Ltd. vs. CCE, Meerut - I reported in 2009 (237) E.L.T. 674 (Tri. - Del.), that the Revenue s appeal against this judgment of the High Court has been dismissed by the Apex Court vide judgment reported in 2011 (269) E.L.T. A108 (S.C.), that same view has been taken by th .....

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the appellant have strong prima facie case in their favour and that in view of the above submissions, the requirement of pre-deposit of Cenvat credit/duty demand, interest thereon and penalty by the appellant company and the requirement of pre-deposit of penalty by Shri Shushil Kumar Jain may be waived for hearing of their appeals and recovery thereof may be stayed. 4. Shri Pramod Kumar, the learned Jt. CDR, opposed the stay applications by reiterating the findings of Commissioner in the impugne .....

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5,50,50,489/- is backed by concrete evidence on record. With regard to the demand of ₹ 32,06,93,486/- based on the power consumption norm, he pleaded that the reasons given by the appellants for vide variation in power consumption are not convincing and, hence, the Commissioner has correctly confirmed this duty demand by adopting power consumption norm of 346 units per MT. He, therefore, pleaded that this is not the case for waiver from the requirement of pre-deposit. 5. Shri Narasimhan, A .....

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ect vehicle number mentioned in some other invoices is JK 02F 9771, which is a truck while the Department has obtained RTOs report in respect of the registration No. not JK 02E 9871, that similarly there is no vehicle with registration No. JK 02 7302 while the vehicle number mentioned in the invoices is JK 02 U 7302, and the Department has wrongly obtained RTOs report in respect of vehicle No. JK 02 7302 while there is no such vehicle, that the vehicle used by the transporter and which is ment .....

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unal in that case had granted unconditional waiver from the requirement of pre-deposit to M/s Kanpur Kashmir Roadways holding that the allegation of non-existence of the transporter is prima facie not sustainable. 5. We have considered the submissions from both the sides and perused the records. 6. Cenvat credit demand of ₹ 5,50,50,489/- against the appellant company is based on the allegation that this Cenvat credit had been taken on the basis of the invoices issued by M/s V.K. Metal Work .....

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is not sustainable. In that case, the question as to whether M/s Kanpur Kashmir Roadways exists or not has also been considered. In view of this, the appellant have prima facie case in respect of the Cenvat credit demand of ₹ 5,50,50,489/- and hence in respect of this Cenvat credit demand unconditional stay has to be granted. 7. As regards the duty demand of ₹ 32,06,93,486/-, we find that the same is based only on the assumption that for production of one copper rods 346 electricity .....

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