AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 1408
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....one is by Revenue. 2. The brief facts in dispute are summarized below : (i) The assessee is a Public Sector Undertaking engaged in the manufacture of various petroleum products. The main products are Methanol as well as Formaldehyde. The assessee has procured Natural Gas from other Public Sector Undertakings, particularly, M/s Oil India Ltd. through pipeline for use in the manufacture. During the course of Audit by the Departmental Officers in 2011, they noticed that approximately 970 Standard Cubic Meter (SCUM) of Natural Gas was being used by the assessee for an output of 1000 MT of Methanol. The above norms were kept in view by Departmental Officers at the time of scrutiny of the records of the appellants regarding accounting of inp....
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.... of the Departmental Authorities ordering payment of duty, are challenged by the assessee and the order of the Commissioner (Appeals) dropping the said demands, have been challenged by the Revenue. (iv) All the appeals are taken up for decision, since the issue is common. 3. The appellant is represented by Shri Bipin Kumar, ld. C.A. assisted by Shri Manob Borthakur, Manager (Finance) of the Appellant Company and Revenue is represented by Shri S. Mukhopadhyay, ld. D.R.. 4. The ld. C.A. submitted that the demands are totally un-justified and advanced the following arguments : (i) The input i.e. Natural Gas, is supplied by M/s Oil India Ltd. directly to pipeline. The entire gas receipts are accounted and utilized in the factory. It w....
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.... on the following case laws : (a) CCE Vs. Dai Ichi Karkaria Ltd. : AIR 1999 SC 32384 (b) Chandan Tobacco Company Vs. CCE, Vapi : 2011 (270) ELT 87 ; (c) M/s Oudh Sugar Mills Ltd. Vs. UOI : 1978 (2) ELT (J172) (SC) ; (d) R.A. Castings Pvt. Ltd. : 2011 (269) ELT 337. Further upheld by the Hon'ble Supreme Court as reported in 2011 (269) ELT A 108 (SC). 5. ld. D.R. justified the demand of duty. He submitted that the demand has been upheld by the authorities below for the earlier period. He emphasized the fact that the norms adopted by the Revenue i.e. 970 Standard Cubic Meter (SCUM) for 1000 MT of Methanol has been provided by the assessee himself. By adopting the norms as above, it is evident that the assessee has failed to accou....
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....e factory. However, the total consumption of Natural Gas in the manufacture of Methanol, which will be different from the norms of production arrived at by taking into account the use only as Feed Stock. 8. It has further been pointed out that the calorific value of Natural Gas is also variable. Since such calorific value may change from day to day, the total consumption of the Natural Gas may vary for the manufacture of unit quantity of Methanol. 9. All these factors when considered, lead to the conclusion that the input output ratio adopted can, at best, cover use of Natural Gas as Feed Stock .970 Standard Cubic Meter of gas for 1000 MT of Methanol cannot be considered as a fixed norm, but can, at best, be considered as a guideline or....
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....t is adopted. Tax is on manufacture and it is to be proved beyond doubt that the goods have been actually manufactured, which are leviable to excise duty. Unfortunately, no positive evidence is coming on record to that effect. Article 265 of the Constitution of India says that no tax shall be levied or collected except by authority of law. Unless the manufacture of the steel ingots is proved to the hilt by authentic, reliable and credible evidence, duty cannot be demanded on the basis of hypothesis and theoretical calculations, without taking into consideration the ground realities of the functioning of the factories. High consumption of electricity by itself cannot be the ground to infer that the factories were engaged in suppression of pr....