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of <h1>Tribunal grants stay on duty recovery for Bhavshakti Steelmines due to revenue's case inadequacies</h1> The Tribunal granted a stay on the recovery of duty, penalty, and interest for M/s. Bhavshakti Steelmines P. Ltd. due to inadequacies in the revenue's ... Stay - pre-deposit of duty, penalty and interest - duty confirmed with interest on the ground that BSPL were indulging in suppression of turnover by not recording the actual production and clearing the same clandestinely without payment of duty - demand is on the basis of electricity consumption as compared to the technical report obtained by the Revenue - appellant submits that there is no other evidence gathered to support the case of clandestine removal against the appellant at all. Further he also submits that according to Dr. Batra’ s report that electricity consumption varies from 555 units to 1046 units/MT and in this case 1026 unit has been adopted for the purpose of demand of duty. He submits that the induction furnace discussed in the report of Dr. Batra used different technology whereas the appellant’ s induction furnace was a local make and used different technology. Further, he also submits that major difference between the induction furnaces considered by Dr. Batra and the appellant’ s induction furnace is that induction furnace considered by Dr. Batra is double converter whereas the induction furnace of BSPL is a single converter - partner had explained the higher consumption of electricity and had not admitted clandestine removal at all - appellant has been able to make out a prima facie case in their favour for grant of stay, requirement of pre-deposit of duty waived, penalty and interest and grant stay against recovery of the same during the pendency of the appeals Issues:Duty demand based on electricity consumption for MS ingots, imposition of penalties, reliance on technical report by Dr. M.K. Batra, discrepancy in type of furnace used, consideration of wastage percentage, cost of production calculation, comparison with other cases, grant of stay.Detailed Analysis:1. Duty Demand and Penalties:The case involves a duty demand of Rs. 1,40,30,004/- on M/s. Bhavshakti Steelmines P. Ltd. for alleged suppression of turnover of MS ingots by clandestine removal without duty payment. Penalties were imposed on the company and its director. The revenue's case primarily relies on the electricity consumption per metric tonne of ingots manufactured by the appellants.2. Technical Report by Dr. M.K. Batra:The revenue's case heavily depends on a report by Dr. M.K. Batra, a professor of Material Engineering at IIT Kanpur, which states varying electricity consumption levels for MS ingots production. However, the appellants argue that their induction furnace's technology differs from the one considered in Dr. Batra's report, emphasizing the use of a single converter furnace.3. Wastage Percentage and Cost of Production:The appellants contest the high wastage percentage attributed to them, arguing that factors like electricity failures in rural areas and technological differences affected production. They also challenge the department's cost of production calculation, presenting certificates from chartered accountants to support their claims of profitability.4. Comparison with Other Cases:The appellants cite the decision of the Hon'ble Allahabad High Court in a similar case, where the issue was decided in favor of the appellants. They distinguish their case from others where different factors were considered in determining duty demands, emphasizing the uniqueness of their situation.5. Grant of Stay:Considering the arguments presented, the Tribunal finds that the appellants have a prima facie case in their favor for the grant of stay against the recovery of duty, penalty, and interest during the appeal's pendency. The Tribunal notes the lack of consideration given to the chartered engineers' reports and the failure to address crucial aspects like the type of furnace used and the reasons for excess electricity consumption on certain days.In conclusion, the Tribunal grants a stay on the recovery of duty, penalty, and interest, highlighting the inadequacies in the revenue's case, the technical discrepancies, and the lack of thorough examination of crucial evidence and factors in determining the duty demand.
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