Appeals allowed as court requires concrete evidence, not assumptions, for excise duty determination.

The appeals were allowed, and the impugned orders were set aside as the majority view, concurring with the Vice President, concluded that excise duty determination based on deemed production from electricity consumption lacked corroborative evidence. The judgment emphasized the need for concrete evidence to prove clandestine removal, rejecting reliance on assumptions from electricity consumption data alone. The decision highlighted distinctions from previous cases and the absence of a legislative provision allowing estimation of production solely based on electricity consumption.

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Issues Involved:
1. Determination of excise duty based on deemed production derived from electricity consumption.
2. Validity of the report by Dr. Batra as a basis for calculating deemed production.
3. Requirement of corroborative evidence for clandestine removal of goods.
4. Applicability of previous judgments and legislative provisions in the context of the current case.

Detailed Analysis:

1. Determination of excise duty based on deemed production derived from electricity consumption:
The primary issue was whether the excise duty could be levied based on deemed production calculated from electricity consumption. The Hon'ble Vice President held that the demand could not be confirmed solely on the basis of deemed production derived from electricity consumption, as suggested in Dr. Batra's report. The Vice President emphasized the absence of cogent material evidencing receipt of unaccounted raw material, unaccounted production, clandestine clearance, unaccounted receipts, and payments. Conversely, the Hon'ble Member (T) upheld the impugned orders, relying on deemed production calculated as per Dr. Batra's report and additional data of electricity consumption during a subsequent period.

2. Validity of the report by Dr. Batra as a basis for calculating deemed production:
The Vice President placed heavy reliance on the Tribunal's detailed judgment in R.A. Casting Pvt Ltd vs CCE, where the demand based on electricity consumption was set aside. It was noted that Dr. Batra's report suggested a range of 555 to 1046 units for producing 1 MT of MS Ingots, but the actual consumption in the appellants' factories was higher. The Vice President found that the demand could not be sustained on assumptions and presumptions without corroborative evidence. The Hon'ble Member (T), however, upheld the demand based on Dr. Batra's report, citing discrepancies and additional evidence submitted during the appeals.

3. Requirement of corroborative evidence for clandestine removal of goods:
The Vice President stressed that the Revenue failed to produce evidence of purchase of additional raw material, sale of clandestinely removed goods, mode of payment, flow back of funds, and transportation records for movement of raw material and finished products. The Vice President held that the demand could not be sustained without such corroborative evidence. The Hon'ble Member (T) relied on additional evidence of electricity consumption data during a subsequent period and discrepancies in the appellants' records to uphold the demand.

4. Applicability of previous judgments and legislative provisions in the context of the current case:
The Vice President distinguished the current case from previous judgments relied upon by the Hon'ble Member (T), such as Triveni Rubber & Plastics, Nagpal Steels Ltd, and Hans Casting Pvt Ltd, on the basis of factual differences. The Vice President noted that the judgment in R.A. Casting (supra) was delivered after considering these judgments and was more applicable to the facts of the current case. The Vice President also highlighted the absence of a legislative provision similar to Rule 173E of the Central Excise Rules, 1944, which allowed for the estimation of production based on electricity consumption.

Conclusion:
The majority view, concurring with the Vice President, concluded that the impugned orders could not be sustained based on deemed production derived from electricity consumption without corroborative evidence. The appeals were allowed, and the impugned orders were set aside. The judgment emphasized the necessity of positive and concrete evidence to prove clandestine removal and rejected the reliance on assumptions and presumptions based on electricity consumption alone.

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