Electricity consumption alone cannot sustain excise duty demand without prescribed norms and supporting factors.

Central excise duty could not be confirmed solely on the basis of electricity consumption where no prescribed and notified consumption norms were first applied and other relevant factors were ignored. The Tribunal stated that a demand founded only on a fixed conversion rate from power usage to alleged production is unsustainable when the statutory framework requires norms to be laid down and deviations to be assessed with additional inputs and circumstances. Electricity consumption, by itself, is not a sufficient basis to determine duty liability, and a demand built on that isolated metric was set aside.

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Issues: Whether central excise duty could be confirmed solely on the basis of electricity consumed, without prescribing and applying any norms and without considering other relevant factors.

Analysis: The demand was worked out entirely from electricity consumption by assuming a fixed conversion rate and then valuing the alleged production on that basis. The Tribunal held that electricity consumption, by itself, cannot be the only criterion for determining duty liability, particularly where the statutory scheme required the competent authority to first prescribe and notify norms for electricity consumption and then examine deviations along with other inputs and relevant circumstances. The Tribunal followed the binding view that such a demand cannot rest on an imaginary basis founded only on electricity usage.

Conclusion: The demand was unsustainable and was set aside in favour of the assessee.

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