2017 (6) TMI 972

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....riod April 2004 to June 2005, the consumption of electricity by the appellant had shown abnormal variation from 54 units to 552 units per M.T. Considering 70 to 80 units as standard norms for manufacture of 1 M.T. of Sponge Iron, the Revenue calculated total production of Sponge Iron, on the basis of maximum limit of consumption of 100 units per M.T. Accordingly Revenue proceeded to demand and recover Central Excise duty alleging unaccounted manufacture and clearance of Sponge Irion. The appellants filed their reply. The Original Authority decided the case and held that he appellants have to pay Rs. 3,93,24,835/- on account of such unaccounted clearance. Penalty of equivalent amount was also imposed under Section 11AC of Central Excise Act,....

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....ation of short levy and any corroborative evidence regarding the alleged unaccounted clearance and manufacture of excisable goods. 4. The learned AR submitted that the show cause notice is based on the standard consumption of electricity for manufacture of Sponge Iron. While he admitted that the basis of such standard is not explained in the show cause notice, he reiterated that on the basis of wide variation in electricity consumption such reasonable interference can be made regarding unaccounted manufacture and clearance of excisable goods. 5. We have heard both the sides and perused the appeal records. The show cause notice was issued after an audit of the accounts of the appellant. The sole basis of demand is given in para 3 of the sa....

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....visions of the then Rule 173E of Central Excise Rules, 1944 which talks about fixing of quantum of normal production by the proper officer. In the present situation, there is no fixation of normal production by any proper officer under the prevalent rules. We also note that the said decision of the Apex court was also examined by this Tribunal in R.A. Castings Pvt. Ltd. vs. CCE, Meerut - I reported in 2009 (237) E.L.T. 674 (Tri. - Del.). It was held that wide variation of consumption of electricity have been reported for the manufacture of 1 M.T. of Steel Ingots. In the absence of technical examination and experiment in the factories of the appellant, norms fixed for demanding Central Excise duty alleging short payment is not legally sustai....