TaxTMI 
TaxTMI 
2007 (11) TMI 231
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.... cause notices were issued to all the appellants. The Commissioner after conducting the proceedings, passed the impugned order. In the impugned order, duty has been demanded to the tune of Rs. 4,57,49,000/- for the period from September, 2000 to April, 2005. Equal penalty under Section 11AB has been imposed. Further, penalty of Rs. 10,00,000/- has been imposed on the main appellants. Penalties have also been imposed on the other appellants who were concerned with the activity of clandestine production and removal. The appellants strongly challenge the impugned order of the Commissioner. Therefore, they have come before this Tribunal for relief. 3. Shri C. Shivadass, learned Advocate appeared on behalf of the appellants and Shri R.P. Raheja, learned JCDR for the revenue. 4. We heard both sides. The total demand in the impugned order is to the tune of Rs. 4,57,49,000/- . Out of this, a part of the demand equal to Rs.12,40,739/- represents the duty on the finished products which is supposed to have been clandestinely removed. The revenue has obtained during investigation, incriminating documents namely 26 slips which contain the details of the removal which have not been account....
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....product produced would be to ascertain what is the principal raw material required for the manufacture of finished products. The Commissioner of Central Excise, Meerut in his Trade Notice No. 41/84, dated 25-3-1984 has published the list of principal raw materials for each excisable commodity. For iron and steel products falling under Chapters 72 & 73, the principal raw material prescribed by the department are (a) steel ingots (b) semi finished steel (c) scrap or (d) pipes-plates or sheets or skelp or strips or pillets. Form the above it is seen that furnace oil is not mentioned as a raw material at all. When a particular item can never be considered as a principal raw material an estimation on the basis of the consumption of the said item cannot be done. The learned Advocate relied on a decision of this Bench in the case of Hyderabad Electrodes v. CCE [2005 (191) E.L.T. 1164]. 7. The show cause notice has proceeded on the basis of a uniform consumption of 40 litres of furnace based on the statements of Shri Ramzan Saab and Shri A. Devendrappa. However, while passing the impugned order, the Commissioner has totally given up the basis adopted in the show cause notice and has tak....
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....ntion to the published balance sheets of two companies namely Tulsyan NEC Limited and Shyam SEL Ltd. In respect of Tulsyan, it was shown that the average consumption for the year 2003-2004 was 56 liters for every MT and for 2004-2005 it was 58. In respect of the other company the average consumption for 2003-2004 was 63.5 litres for every MT of rolled product produced. Therefore it was urged that the industry average of the consumption of furnace oil is about 59 to 60 litres for every MT while the appellants average consumption is about 62 litres which compares favourably with industry average. 10. Our attention was also invited to the report given by the Petroleum Conservation Research Association of the Ministry of Petroleum and Natural gas. The PCR in their letter dated 22-11-004 has brought out the various factors which affect fuel consumption with specific reference to steel rolling mills. Apart from the above, the major factors affecting consumption of furnace oil in rolling mill are as follows :- (a) The recuperators of the Furnace sometimes get chocked resulting in under-utilization of the capacity of the Furnace, which in turn results in non-recovey of waste heat. ....
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....MT of billets was found short on 15-4-2005. The Commissioner has added both the quantity to arrive at a net quantity of 443.007 MTs and demanded duty of Rs. 14,15,076/- and education cess of Rs. 28,101/-. This is seriously challenged by the appellants. It was submitted that the addition of a quantity found short and the quantity found in excess cannot be tallied. Evidently the excess quantity of billets found on 2-5-2005 would have been consumed in the manufacture of rolled products. The stock of rolled products found on 15-4-2005 shows an excess of stock. The shortage of billets to the extent of 162.607 cannot be considered in isolation as there is a correspondingly an excess stock of 603 MT of rolled products. If at all there could, be a demand it can only be on the quantity of 162.607 MTs of billons which would amount to Rs. 5,26,650/-. 14. The learned Departmental Representative Shri Raheja pointed out that even though the clandestine production and removal have been established, on the basis of the 26 slips and the other incriminating documents recovered the appellants should have adopted the same modus operandi for the past 6 years also. He said, the Commissioner was right....