MS ingots manufacturer wins appeal as duty demand based solely on electricity consumption expert opinion gets rejected

CESTAT Bangalore set aside duty demand against MS ingots and CTD bars manufacturer based solely on expert opinion regarding electricity consumption. The appellant manufactured MS ingots captively consumed for CTD bars production. Revenue calculated alleged clandestine removal by comparing expert-estimated production (using power consumption ratios of 1000 units per MT for ingots, 200 units per MT for CTD bars) with statutory registers. Tribunal followed its earlier decision in appellant's case, noting absence of evidence for goods transport without duty payment or undisclosed sale proceeds, concluding the power consumption basis was incorrect. Appeal allowed, impugned order set aside.

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Issues involved: Appeal against Order-in-Original alleging clandestine manufacture and clearance based on electricity consumption.

Summary:
The appellant, engaged in manufacturing non-alloy steel products, was issued show-cause notices for alleged clandestine manufacture and clearance based on electricity consumption. The appellant contested the demand of duty solely relying on expert opinion of Mr. G.S. Hegde, Chartered Engineer. The Tribunal, considering previous judgments and lack of corroborative evidence, set aside the demand. The Tribunal emphasized the onus on the department to prove clandestine activities and highlighted the need for concrete evidence. The Tribunal referred to similar cases and established that demands based solely on electricity consumption are not sustainable without further evidence. The Tribunal upheld the principle that adverse conclusions cannot be based on presumption alone. The Tribunal concluded that the demand lacked a reliable basis and set it aside, allowing the appeal with consequential relief to the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the demand of duty alleging clandestine manufacture and clearance solely based on expert opinion of electricity consumption, emphasizing the need for concrete evidence to support such claims.

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