TaxTMI 
TaxTMI 
2015 (7) TMI 460
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.... any duty and was not registered with the Central Excise Department, as it was availing full duty exemption. 1.2. On 27.10.2004 the Officers of Directorate General of Central Excise Intelligence, Ahmadabad on receipt of intelligence about duty evasion by the appellant company by under reporting its production of cement, searched the factory premises of the appellant company at Zeerabad, Dist. Dhar, Office premises of the appellant company at 11, 3rd Floor, Daba Bazar, Indore, residential premises of Shri.Jagdish Agarwal, Director of the appellant company in Indore and also the premises of certain traders M/s. Burhani Traders, Khandwa, M/s. Amolak Enterprises, Khandwa, M/s. Mahaveer Transport, Rajgarh (Dhar) and M/s.Arora Road Lines, Rajgarh (Dhar). In the course of search of the office premises of the appellant company at Dava Bazar, Indore certain documents were recovered which were resumed. One of the documents recovered was a ledger which contained details about sale of cement during the period from 01.04.2004 to 18.10.2004. The notebook seized from the office contained entries regarding sale of cement from 19.10.2004 to 27.10.2004. Statement of Shri Darmendra Goyal. Manager of....
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....lant of the appellant company was 7,48,710. According to the Department, the production during the period from 01.04.2004 to 29.09.2004 was 10346.5 M.Ts. after excluding the opening balance of 372 M.Ts. as on 01.04.2004. On this basis the investigating officers calculated that power consumption for production of 1 M.T. of cement is 72.36. Applying this power consumption ratio to the period from April 2001 to March, 2004, Investigating Officers estimated the actual production of cement during each financial year 2001-02, 2002-03 and 2003-04 by dividing the power consumption in that financial year by 72.36. Since, during each of the three financial years the appellant had not paid any duty claming that value of their clearances were within the exemption limit of Rs. 1.00 Crore, while the value of the production during each of these three years, as estimated by the Officers was much more than the exemption limit of Rs. 1.00 Crore, it appeared that during each financial year from 2001-02 to 2003-04, the appellant company had evading the duty, the details of which are given in annexure 29 to the show cause notice. The duty demand of Rs. 1,44,53, 850/- is on this basis. 1.5. After issue....
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....us, he confirmed the total duty demand of Rs. 42,94,662/- alongwith interest on it under section 11AB. He also imposed penalty of equal amount on the appellant company under section 11AC and penalty of Rs. 1,00,000/- on Shri Jagdish Agarwal, Director under rule 26 of the Central Excise Rules, 2002. Against this order of the Commissioner both the appellant company and its Director Shri Jagdish Agarwal as well as the Revenue are in appeal. 2. Heard both the sides. 3. Shri K.K. Anand, Advocate, the ld. Counsel for the appellant pleaded that in respect of duty demand for the period from 01.04.2001 to 31.03.2004 based on the estimated production, which, in turn, is based on the power consumption norm of 72.36 Units per M.T. the Commissioner has gone beyond the scope of the show cause notice holding that during that period the appellant had also used electricity generated by the D.G. Set, that there is no basis for allegation that during the period from 01.04.2001 to 31.03.2004, in addition to the electricity purchased from the electricity board, the appellant had also used electricity generated by their DG set, that the Commissioner has wrongly arrived at the power consumption norm of....
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.... based on this calculation is totally wrong; that it is well settled law that merely on the basis of alleged power consumption norm duty demand cannot be confirmed; and in this regard he relies upon the judgment of the Tribunal in the case of R.A. Castings Pvt. Ltd. vs. CCE, Meerut-I reported in 2009 (237) ELT 674 (Tri.Del.), which has been affirmed by the Allahabad High Court vide judgment reported in 2011 (269) ELT 337 (All.) and the judgment of Allahabad High Court has further been affirmed by the Apex Court reported in 2011 (269) ELT A108 (SC) and that same view has been taken by the Tribunal in its order dated 20th March, 2012 in the case of CCE, Indore vs. Venus Alloys Pvt. Ltd. It was, therefore, pleaded by Shri Anand that duty demand of Rs. 26,12,951/- for the period from 01.04.2001 to 30th March, 2004 is not sustainable at all. He, however, did not seriously contest the duty demand of Rs. 16,57,293/- for the period from 01.04.2004 to 26.10.2004, which was based on the entries in the ledger- book and note-book seized from the office of the appellant company. He also pleaded that there is no justification for imposition of penalty on Shri Jagdish Agarwal under Rule 26 of the....
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....4 total cement cleared was 12071.5 M.Ts. However, during the financial year 2004-05 when they were availing of SSI exemption under Notification No.6/2003-CE dated 01.03.2003, only the clearances upto repees one crore in a financial year were fully exempt from duty and they were required to pay duty after crossing the threshold limit of rupees one crore. The threshold limit of rupees one crore had been crossed by the appellant on 14.06.2004 and by 14.06.2004 the appellant had manufactured and cleared 5442.33 M.Ts. of cement of valued at Rs. 1,00,00,000/-. Therefore, the clearances beyond this limit would be eligible for duty. The entries in the ledger book and note book have not been seriously disputed by the appellant as in fact entries in the note book and ledger had been explained by Shri Dharmender Goyal in his statement dated 27.10.2004 and 20.01.2005. Accordingly, we hold that duty has been correctly demanded on the value of clearances during 2004-05 which are beyond rupees one crore and, accordingly, the duty demand of Rs. 16,57,293/- which is on the value of cement cleared beyond rupees one crore has to be upheld. In fact, this duty demand has not even been seriously c....
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.... report dated 16.03.2010 that the power consumption in their unit is 212 units per M.T. It is also pleaded that during February, 2006 and March, 2006, two Chartered Engineers, Shri. Prakash Chandra Jain and Shri K.M. Tompre had visited the appellants units and while Shri Prakash Chandra Jain had given opinion that power consumption norm in their unit is 228 Unit per M.T. Shri K.M.Tompre has given report that the power consumption norm in their cement plant is 231 units per M.T. Thus, it has been pleaded that the power consumption norm determined by the Centre of Energy Studies and Research 212 M.T is comparable with the power consumption norm determined by the other two Chartered Engineers; and, therefore, the Department cannot discard this evidence of the experts and arbitrarily adopt the norm of 72.36 units. It has also been pleaded that the Commissioner has arbitrarily fixed the norm as 155 unit per M.T. on the assumption that electricity had also been generated during the period of dispute by the generating sets. 6.3 The basis of determining power consumption ratio of 72.36 units per M.T. is explained in para 9 of the show cause notice. Para 9 (i) gives the month-wise figures ....
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....electricity from D.G. sets. 6.5. The revenue in its appeal mainly questions the Commissioner s findings regarding the power consumption norm being 155 Units per M.T. But there is nothing in revenue s appeal to explain as to how the power consumption norm of 72.36 unit per M.T. determined by the investigating officer is correct, when the study conducted by Centre of Energy Studies & Research on the Department s request revealed that the power consumption of the plant is 212 unit per M.T., which compares favourably with the power consumption norm determined by two other Chartered Engineers, Shri Prakash Chandra Jain and Shri K.M. Tampre. The Revenue s appeal also mentions that the Commissioner has failed to appreciate the fact that the assessees premises were searched once again by the DGCI on 30th March, 2007 and during the course of investigation at that time also, on comparison of power consumption and the actual production during January 2007 to March, 2007, the power consumption ratio was found to be 74 unit per M.T. which is close to the figure arrived at 72.36 Unit per M.T. However, it has not been explained in the Revenue s appeal as to on what basis the ratio of 74 Units pe....