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TMI Blog2019 (6) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... lty of Rs. 15,00,000/- on the Director of the Company Shri Muthulal Gupta under Section 26 of Central Excise Rule, 2002 for alleged clandestine removal on the basis of case study analysis is assailed by both the appellants in these two appeals. 2. Factual backdrop of the case is that appellant Company M/s Bhavshakti Steelmines Pvt. Ltd. was engaged in manufacture of 'M.S. Ingots'. Basis intelligence report that appellant was suppressing turnover of the excisable goods i.e. 'M.S. Ingots' to evade tax by clandestinely removing the same, information concerning raw material purchase, daily production, value of clearances, electricity consumption for the period 2003-04 and 2004-05 were obtained, detail was examined with respect to input output ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Singh, with Ms. Mahi Lalka submitted that appellant had been consistently pleading before the authorities justifying the reason of high electricity consumption which, among other factors are attributed to inefficiency of old induction furnace, quality of raw material, fluctuation in electricity, inferior qualities of furnace, electricity wastage due to load shedding, time lost in handling production process by untrained workers, type of furnace which was single converter whereas Dr. Batra's report was based on double converter furnace, and last but not the list, consumption of supply of electricity for other purpose including its use in the office as well as staff quarters. He further submitted that entire show-cause notice was based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Authorised Representative for the respondent-department Shri Ajay Kumar, Additional Commissioner while supporting the reasoning and rationality of the order passed by the Commissioner, argued that appellant's director had cited no reason for loss up to 18% during melting/burning and confessed during recording of his statement that they had maintained no record of raw material procurement, heat register, gate register of transportation of finished goods and the certificate from Energy Auditor as well as Chartered Engineer were procured and submitted only on 16.04.2008. Invoice of procurement of furnace was attached to appeal on 02.02.2001 for which those should be regarded as documents generated to defend the case. In placing reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h clandestine removal. Learned Counsel for the appellant brought it to our notice that appellant had explained during the recording of statements that consumption of electricity was high because the induction furnace was locally made one; frequent power failure in the rural area where the factory was located that resulted in high wastage since processing remained incomplete and product become wastage to which learned Authorised Representative countered by saying that apparently those factors were taken into consideration by Dr. Batra for which lower and upper range of electricity consumption varies between 555 units and 1026 units per MT. However, Appellant had produced Chartered Engineers reports to substantiate that the electricity consum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion; sale prices of the finished goods were not only more than cost of production but also appellant had made profit on both the years from M.S. ingots and learned Commissioner had also ignored such certificate of the Chartered Accountant. 6. From perusal of the evidence on record as discussed above and as no experiment had been conducted in the factory of the appellant for arriving at the consumption norm of electricity in the factory of the appellant, it can only be stated that strong suspicion exist against the appellant concerning clandestine removal on the same but the same could not be substantiated. As has been held in the case laws of R.A. Castings Pvt. Ltd. cited above, the entire case appears to have been based on assumption ..... X X X X Extracts X X X X X X X X Extracts X X X X
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