AI Drafter 
TaxTMI 
TaxTMI 
2016 (10) TMI 763
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....ected against order dated 15.07.2004 of Commissioner of Central Excise, Indore are filed by the Revenue. The brief facts of the case are that based on intelligence to the effect that certain units of the Magnum Group were not discharging Central Excise duty by resorting to clandestine removal of excise goods, investigations were started by the department in April, 1999. On completion of the investigation a show cause notice dated 20.04.2000 was issued to three main manufacturing assessees to demand Central Excise duties and to impose penalties. The case was adjudicated and the Commissioner vide the impugned order dropped all proceedings against all the noticees. The conclusion of the original authority is as below: In view of the above d....
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....es Pvt. Limited were producing much more than what is recorded in the RG-I register. (b) There are cases of electricity theft booked by MPSEB against these units on 01.10.1999. This supports the department claim for suppression of production. (c) The duty calculation was made based on electricity consumption based on production of private records maintained by Sh. R. C. Sharma from 01.04.1999 to 24.04.1999. The detailed production was accordingly fixed and duty demand for the impugned period was calculated. (II) CASE AGAINST M/S I. R. INDUSTRIES PVT. LIMITED: (a) The private record maintained by Sh. R.C. Sharma shown datewise shiftwise production for the period 01.04.199 to 27.04.1999. The unit is using g....
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....cause notice was based on evidences collected and not based on Rule 173E. 4. We have heard ld. AR for the Revenue and ld. Counsel for the respondent-assessees. We have also perused appeal records including written submissions made by Revenue as well as by the respondent. The case of the department is mainly based on a handwritten chart recovered from Sh. R.C. Sharma who was present in the factory premises of M/s B. R. Associates Pvt. Limited on 28.04.1999. The production figures mentioned in the chart was considered as true in respect of two manufacturing units - M/s B. R. Associates Pvt. Limited and M/s I.R.S. Industries Pvt. Limited. The calculation of duty demand was mainly projected from this basis by adopting the norms as per Rule 1....
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....s have produced evidence that he is not on employment with them during the material time. Further, even in the chart the figures were selectively taken in respect of different respondents without assigning any reason. 7. Regarding invoking provisions of Rule 173E to quantify duty demand from two of the respondents, we note that the Revenue in appeal contended that wrong mentioning of rules will not vitiate the proceedings. Further, reference to Rule 173E has been made only for the limited purpose of quantification of duty evaded by the party by adopting reasonable and pragmatic means.. We find that it is not a simple case of wrong mentioning of rule. In para 16.3 of the show cause notice the basis of calculating the quantum of duty was m....
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....ere does not exist any direct evidence of clandestine removals. Here electricity consumption alone has been used to work out the probable production and that two for only 24/27 days. There is nothing to indicate as to how the average production derived could be taken as the standard production and was not a one time achievement. The excess production has not been established in the case. Here it is worthwhile to mention that for working out the demand, only 24/27 days of production written on a piece of paper recovered from a person who has been disowned by the noticee No. 2 & 3, can not be taken as a proof. As regards, the electricity consumption it depends upon the line losses, efficiency of panels etc. Moreover, at the most, if one month....
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..../s I.R.S. Industries Pvt. Limited which was basis for the demand by Revenue is not sustainable. 11. We note that the demand against M/s Magnum Steels Limited was mainly based on the allegation that the other two manufacturers respondents have clandestinely manufactured ingots which were received by M/s Magnum Steels Limited for clandestine manufacture and clearance of their final product. We note that when the case of manufacturer suppliers of ingots itself has not been supported with adequate evidence further demand based on such purported excess production of raw material cannot stand. Further, we also note that average consumption of electricity was worked out in respect of M/s Magnum Steels Limited based on the consumption of particu....