TaxTMI 
TaxTMI 
2011 (4) TMI 983
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....by not recording the actual production and clearing the same clandestinely without payment of duty. The period of demand is 2003-04 and 2004-05 and the demand is on the basis of electricity consumption as compared to the technical report obtained by the Revenue. Penalty equal to the duty has also been imposed on BSPL and penalty of Rs. 15 lakhs has also been imposed on Mithunlal Gupta, Director of BSPL (second appellant). 2. The ld. counsel on behalf of the appellant submits that the whole case of the revenue is based on the report of Dr. M.K. Batra, Professor of Material Engineering of IIT Kanpur who conducted a case study and prepared a report in December 2000 (Technical opinion report on productivity of induction furnace). He sub....
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....t exist but the person who gave the statement had stated that he had understanding for manufacturing of induction furnace. In any case, there is no dispute about existence of the induction furnace but the department' s case is quantum of production induction furnace is capable of. He also drew our attention to the decision of the Hon'ble Supreme Court in the case of Triveni Rubber & Plastics v. CC Cochin reported in 1994 (73) E.L.T. 7 (S.C.) to support his contention that without determining the normal production by considering all the factors relevant to the issue, normal production cannot be determined. He submits that even though this decision was rendered in the context of erstwhile Rule 173E of the Central Excise Rules, 1944, the decis....
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..... Further, he also submitted that in the case of Nashik Strips, under circumstances similar to the appellant' s case, the Tribunal had granted unconditional stay of recovery and waiver of pre-deposit. Further, he also submitted that another case which is somewhat similar to present case is Rattan Steel Works v. CCE, Chennai - 2009 (236) E.L.T. 152 (Tri.-Chennai). However, in that case there was an admission from the partner of clandestine removal and there was also recorded evidence to show that records had been destroyed which related to sale of ingots and purchase of raw materials. Further, the statements were recorded after two years. Further he also submitted that in this case the appellant partner had explained that electricity consump....
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....ts. Further, he also drew our attention to some of the cases in Sridhar Casting wherein the department had found that the appellant had shown profits by stock market trading and trading activity unlike the case of the appellant in this case. He also submits that the Commissioner has not at all discussed the certificate of the chartered accountant submitted by them and has simply ignored them. Similarly he also submits that department has not given any evidence or literature to show that the wastage has to be less than 10%. In the absence of any such evidence, the conclusion that wastage is more is not acceptable. 5. Ld. JCDR submitted that MS ingots is a commodity very prone to evasion and it is well settled that hard evidence in th....
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....o excess wastage in process resulting in accountal of lower quantum of production and thereby realisation of less duty by the Revenue. Revenue has placed reliance upon report of Dr. N.K. Batra, Professor, IIT Kanpur for this purpose. According to Dr. Batra electricity consumption can vary from 555 units to 1026 units per metric tone. We find that, in this case the appellants have produced reports from two Chartered Engineers both of which have given the opinion that electricity consumption shown by the appellant is reasonable when factors like type of furnace used and the quality of the furnace are taken into account. The learned Commissioner in his order has not at all discussed these two reports. We also find that the Chief Commissioner, ....
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....antum of wastage. While the appellant has shown wastage of 18%, which the department considers is very high, the learned Commissioner who has indicated that such high wastage cannot go beyond 10% has neither relied upon any literature or expert opinion. There seems to be nothing about this in Dr. Batra's report also. In the absence of any specific data or technical literature it has to be held that the department has not been able to make out a case that wastage of 18% shown by the appellant 5 was too high. Further we also find force in the arguments of the learned counsel that this has nothing to do with fixing of normal production. Even though Rule 173E of Central Excise Rules is no longer in force, the very fact that the Commissioner has....