TaxTMI 
TaxTMI 
2014 (3) TMI 123
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....E OM METALS LTD. 2,84,58,777/- 2,84,58,777/- E/S/658/10(E/A/569/10) IGNITE STEEL (P) LTD. 81,17,547/- 81,17,547/- E/S/1006/11(E/A/845/11) KAMSA STEEL PVT. LTD. 70,97,073/- 70,97,073/- E/S/1010/11(E/A/848/11) SHREE OM METALS LTD. 25,18,183/- 25,18,183/- E/S/1090/11(E/A/884/11) NAREDI INTERNATIONAL (P) LTD. 6,53,81,354/- 6,53,81,354/- 3. The issues involved in all these applications are common, therefore, taken up together for disposal. Duty demands have been confirmed and penalties imposed on the respective Applicants on the ground that they had manufactured and removed excisable goods clandestinely, without payment of duty, during the relevant period, as detailed in each of the impugned Orders. The basis for confirmation of the demand, in all these cases, is stated to be that the average consumption of electricity, necessary for production of 1.00 MT of MS Ingots, as opined by the technical expert, one Late Dr. N.K. Batra, Professor of IIT, Kanpur in the year, 2000, was much higher in each of these cases. Taking into consideration that for manufacture of 1.00 MT of MS ingots, quantum of electricity required is around 1000 uni....
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....roceeding, submitted that even though in the said chart, the finding of the ld. Commissioner had been recorded in support of confirmation of demand against each of the Applicants, but analysis of the evidence referred therein, would reveal that the entire exercise rests only on the basis of consumption of electricity, which varied from one unit to another, depending on various factors, as discussed by the Tribunal in R.A. Castings case (supra). 4.3. The ld. Consultant has categorically submitted that there is no other evidence to substantiate manufacture and clearance of the goods from the factory clandestinely, except hypothetical calculation of manufacture and clearance of goods in excess of the quantity recorded in the Daily Stock Account (DSA), without payment of duty, on the basis of consumption of electricity. The ld. Consultant further submitted that the principle has been settled in R.A. Castings case(supra), and consistently observed by the Tribunal in a series of cases, that mere consumption of electricity/consumption of one raw material, cannot be the basis for confirmation of demand. The Ld. Consultant further submitted that following the said judgment, the Ld. Commi....
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....y. 5.1. He has further submitted that the Hon'ble Bombay High Court after taking note of the R.A. Casting's case(supra) and following the observation of the Hon'ble Supreme Court in Bhagwati Steel Pvt. Ltd's case, had directed pre-deposit from the applicants. He has further submitted that in addition to the evidence of electricity consumption, there are other evidences against the Applicants and sought time to furnish the same in a detail tabular form, against each of the Applicants. Consequently, after obtaining necessary report from the respective Commissionerates, he has submitted the data, narrating the evidences against each of the above Applicants. The ld. Spl. Counsel submitted that in the last column of the said chart against each of the Applicants, the evidence on the manipulation of production and clearance has been narrated, even though mostly based on consumption of electricity. It is his submission that the evidences are in the nature recorded by the Tribunal in the case of Shridhar Castings Pvt. Ltd. Vs. Commissioner of Central Excise, Nagpur 2012 (281) ELT 270 (Tri.-Mum.), which has been later accepted by the Bombay High Court in Orange City Alloys case(supra). He....
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....le Bombay High Court, whereby the Division Bench had set aside the Order. But later, the Larger Bench of the Bombay High Court referred the matter to the Division Bench for reconsideration. The Division Bench of the Bombay High Court in Orange Alloys Pvt. Ltd.(supra), disposing of appeals under Section 35G of CEA,1944 against the judgment of the Tribunal in Shridhar Castings Pvt. Ltd. Vs. Commissioner of Central Excise, Nagpur 2012 (281) ELT 270(Tri.-Mum.), after considering case laws on the subject including that of Bhagawati Steels case and RA Castings' case(supra), observed as follows: 11. In the present case, prima facie, at this stage, it emerges from the order passed by the Adjudicating Officer that the allegation against the Appellants was of suppression of actual production; a clandestine removal of goods and of the fabrication of record. Prima facie at this stage that finding has been established by the Adjudicating Officer. The Adjudicating Officer has recorded that the actual electricity consumed between the period 16 December, 2003 and 24 March, 2008 was 7,91,87,789 units. On this, there is no dispute sinc....
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....-deposit duty in the amount of Rs. 1 crore as against a total duty due of approximately Rs. 4.5 crores. 13. The Tribunal has held that the order passed by the Supreme Court in BhagwatiIspat would have to be followed. The Tribunal similarly noted the order of the Supreme Court in Everest Rolling Mills. In BhagwatiIspat which also involved an issue of clandestine removal, the Supreme Court directed a deposit to be made of one-fifth of the duty. In Everest Rolling Mills, the Supreme Court required a pre-deposit of twenty two per cent of the duty demanded. Having regard to this position the order of the Tribunal directing the deposit of fifty per cent of the duty at this stage would appear excessive particularly having regard to the directions issued by the Supreme Court in BhagwatiIspat and Everest Rolling Mills. The order of the Tribunal should be modified to that extent. 14. For the reasons indicated above, we direct that the Appellants shall make a pre-deposit of twenty five per cents of the demand for duty. We dispense with the deposit of penalty. The pre-deposit shall be effected within a period of si....