TMI Blog2016 (10) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... d state generator from 2000 KW to 2500 KW various other changes were made to increase the cooling of the assess generator. The furnace crucible capacity was increased 4 MT to 5 MT. The changes were carried out only in one crucible. These things have been explained by M/s Electrotherm (India) Limited who carried out the said upgradation work. The department did make reference to M/s Electrotherm, who confirmed the said expansion and supplied the supporting invoice for the same. The Chartered Engineer appointed by the department appeared before the Tribunal who confirmed that the revised capacity of the appellant as 5.8 MT. The proceedings by the department and the impugned orders heavily relied on certain suspicion and doubts raised against the claims by the appellant without due counter verification to categorically establish the correct expanded capacity by the Revenue - the denial of exemption is not justified - appellant's claim of expanded capacity cannot be rejected on perusal of documents placed - appeal allowed - decided in favor of appellant. - Excise Appeal Nos. 115, 116, 117 of 2007, Excise Appeal Nos. 772 - 773 of 2012, Excise Appeal Nos. 58006 to 58010 of 2013 - Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nace by adding certain electric parts. (ii) That as per the definition given by the Hon ble Tribunal in the case of M/s Travancore Titanium Product vs. CC the substantial expansion claimed by the party is not on such a scale and such a nature as would be comparable to the new unit. (iii) That the party have not bought any brought certain items (as per para 1.5 above) in the factory but they have attempted to prove it s import to their factory through Trade Tax Forms No. 31 which were not found entered in the statutory records of Trade Tax Check Post. (iv) That the party neither enhanced it s electrical power load nor they upgraded the same by installing any transformer. (v) In addition to above, discrepancies in the certificate issued by the Chartered Enginner, General Manger of DIC, Kotdwar have been pointed out . 3. The original authority held that Notification No. 50/2003-CE requires increase in installed capacity by not less than 25% and no other definition given by other statute can be made applicable to the said Notification. It was also noted that even the Board Circular dated 21.01.2004 makes it clear that it is the increase in installed capacity of the unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004 relied upon the Chartered Engineer s certificate issued on 16.5.2003, as referred above and not on the certificate dated 26.4.2004. * The certificate issued by the Government department cannot be doubted in this manner. If the adjudicating authority had such doubts, proper recourse was to undertake investigation and response from DIC (as is stipulated in the letter dated 20.11.2007 of the Commissioner of Central Excise, Chandigarh also). Having not done the same, the ld. Commissioner could not act to the prejudice of the Appellant, only by expressing doubt over the genuinety of the documents produced by the appellants, without any supporting evidence. It is settled law that suspicion, howsoever strong, cannot take the place of evidence. 3 Para 4.5- Invoices issued by M/s Electrotherm to the appellant are doubtful on account of the following: * The furnace has been upgraded twice for increasing capacity. Since volumetric expansion is necessary, it is incomprehensible that the same change can be done twice in the furnace originally of 3 MTs. * Invoice dated 12.2.2002 establishes that the capacity of furnace was 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 Para 4.8 4.9- The sanctioned load of 2800 KVA for electricity connection of the appellant was not sufficient for 5 MT capacity of the furnace. As per the rules of Uttaranchal Power Corporation Ltd. minimum load for 1 tonne furnace should not be less than 600 KVa. It was submitted before the ld. Commissioner, as recorded in para 3.1 (viii) that the electricity load was sufficient for 5 MT capacity furnace and no evidence to contradict the claim of the appellant has been produced by the Department. Further, the regulations provide for load for 1 MT furnace and not for 5 MT, therefore, the same has no relevance to the present case of the appellant. 2800 KVA is sufficient for upto 6 MT furnace, as evident from quotation of Electrotherm. 5 Para 4.6- Power factor unit and CI rough castings purchased under trade tax Form 31, Nos. 345310 and 345699 were not entered in the check post at Kotdwar. The stamp on these Form 321 is different from the stamp on Form 31 with No. 345705 for furnace. Not all goods are scrutinized and entered at check posts. The appellant does not have any control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come down to 1068 units per MT, which is again not possible. This finding again is based only on a suspicion, without any legal or factual basis and it reflects improper understanding of the ld. Commissioner regarding the technical aspects of power consumption in the furnaces. In perfect situations, like perfect scrap with no impurity, 521 KW per MT of electricity consumption is there. But practically, this figure is not achievable. The energy efficiency upon expansion was possible on account of various upgrades in the machinery, like installing additional converters, changes in DC Choke, capacitor bank etc. 9 Para 4.1- Installed capacity before/ after expansion was same but party was not recording the total production earlier and as soon as the exemption notification came into existence they started recording the full quantity produced. This finding again is without any legal or factual basis. It is surprising that despite hinting at the possibility of excess production earlier, which obviously means that those goods were clandestinely cleared by the appellant without payment of duty, the ld. Commissioner has take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se for denial of exemption was mainly sought to be supported on the ground of (a) Certain items said to have been used in the capacity expansion have not crossed the Trade Tax Check Post as stamps on the documents appeared to be different. (b) There is no enhanced power load and no transformer added and (c) The certificate issued by Chartered Engineer and General Manager, DIC were having discrepancy and were issued without due scientific verification of machinery in the appellants unit. We find that regarding certain items passing the check post the doubts raised by department could have been easily cross verified both by way of checking with the concerned authorities or by physically verifying the availability of such instrument in the appellant s premises. We do not find any such examination by the department. 8. Regarding the discrepancies in the Chartered Engineer certificate and the confirmation of capacity by the General Manger, DIC we find that the same are given as per the request of the appellants based on materials produced. The appellant did categorically claimed that the Chartered Engineer verified physically before issuing certificate. Here we note that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncreased to 4 MT in the second stage of upgradation and overhauling. The appellants claimed to have changed the rating of solid state generator from 2000 KW to 2500 KW various other changes were made to increase the cooling of the assess generator. The furnace crucible capacity was increased 4 MT to 5 MT. The changes were carried out only in one crucible. These things have been explained by M/s Electrotherm (India) Limited who carried out the said upgradation work. The department did make reference to M/s Electrotherm, who confirmed the said expansion and supplied the supporting invoice for the same. The Chartered Engineer appointed by the department appeared before the Tribunal who confirmed that the revised capacity of the appellant as 5.8 MT. 11. Upon perusal of the documents relating to procurement of various capital as well as electrical items, labour charges paid and other related documents we find that the appellant s claim of expanded capacity cannot be rejected. The proceedings by the department and the impugned orders heavily relied on certain suspicion and doubts raised against the claims by the appellant without due counter verification to categorically establish the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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