Tribunal upholds duty demand, reduces penalty for Director in tax appeal case.

The Tribunal upheld the duty demand of Rs. 16,57,293/- for the period from 01.04.2004 to 26.10.2004 along with interest and equivalent penalty. However, the duty demand of Rs. 26,12,951/- for the period from 01.04.2001 to 31.03.2004 was set aside. The penalty on the Director was reduced to Rs. 10,000. The appeals filed by the appellant company and its Director were partly allowed, while the appeal filed by the Revenue was dismissed.

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Issues Involved:
1. Duty demand for the period from 01.04.2004 to 26.10.2004 based on seized ledger and notebook entries.
2. Duty demand for the period from 01.04.2001 to 31.03.2004 based on estimated production using power consumption norms.
3. Imposition of penalties under section 11AC and Rule 26 of the Central Excise Rules, 2002.

Issue-wise Detailed Analysis:

1. Duty Demand for the Period from 01.04.2004 to 26.10.2004:
The appellant company, engaged in the manufacture of ordinary portland cement, was found to have cleared 12071.5 MT of cement during the period from 01.04.2004 to 26.10.2004 based on entries in a ledger and notebook seized from their office. The clearances exceeded the exemption limit of rupees one crore under Notification No.8/03 CE, making them liable for duty. The duty demand of Rs. 16,57,293/- for this period was upheld as the entries were not seriously contested by the appellant. The Tribunal confirmed this duty demand along with interest and equivalent penalty under section 11AC.

2. Duty Demand for the Period from 01.04.2001 to 31.03.2004:
The duty demand of Rs. 1,44,53,850/- for this period was based on an estimated production calculated using a power consumption norm of 72.36 units per MT. However, the Commissioner, in the denovo adjudication, determined the power consumption norm to be 155 units per MT, confirming a reduced duty demand of Rs. 26,12,951/-. The appellant contested this, arguing that the power consumption norm should be 212 units per MT as determined by the Centre of Energy Studies & Research and corroborated by two Chartered Engineers. The Tribunal agreed with the appellant, noting that the Department's calculation of 72.36 units per MT was flawed and unsupported by evidence. Consequently, the duty demand of Rs. 26,12,951/- for this period was set aside.

3. Imposition of Penalties:
The Commissioner had imposed a penalty of Rs. 42,94,662/- on the appellant company under section 11AC and Rs. 1,00,000/- on Shri Jagdish Agarwal, Director, under Rule 26 of the Central Excise Rules, 2002. Given the reduction in the duty demand, the Tribunal reduced the penalty on Shri Jagdish Agarwal to Rs. 10,000/-.

Conclusion:
The Tribunal upheld the duty demand of Rs. 16,57,293/- for the period from 01.04.2004 to 26.10.2004 along with interest and equivalent penalty. The duty demand of Rs. 26,12,951/- for the period from 01.04.2001 to 31.03.2004 was set aside. The penalty on Shri Jagdish Agarwal was reduced to Rs. 10,000/-. The appeals filed by the appellant company and its Director were partly allowed, while the appeal filed by the Revenue was dismissed.

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