Clandestine excise demand based only on electricity consumption fails without corroborative evidence of unaccounted production.

A demand for central excise duty based solely on abnormal electricity consumption and presumptive production estimates could not be sustained without corroborative evidence of clandestine manufacture or clearance. The record showed no technical study, field verification, or other factual basis for fixing the alleged power norms, and prior settlement references or a different case did not prove the present allegation. In the absence of positive evidence linking electricity use to unaccounted production, the demand and penalty were held unsustainable, and the impugned order was set aside in favour of the assessee.

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Issues: Whether a demand of central excise duty for alleged unaccounted manufacture and clearance can be sustained when it is based solely on abnormal electricity consumption without corroborative evidence.

Analysis: The demand rested on estimated norms of electricity consumption and a presumptive calculation of production, but the record disclosed no technical study, field verification, or factual basis for fixing the alleged norms. The earlier references to settlement proceedings and another case involving different facts did not supply proof of clandestine manufacture in the present matter. The Revenue did not adduce positive evidence to establish unaccounted production or clearance, and electricity consumption alone was held insufficient to support such a demand.

Conclusion: The demand was not sustainable and the impugned order was set aside in favour of the assessee.

Final Conclusion: Excise duty and penalty confirmed only on the basis of estimated power consumption, without corroboration, cannot be upheld in law.

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