TaxTMI 
TaxTMI 
2008 (6) TMI 188
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....hout accounting for the same in their records and without payment of duty and had received cash payment. The statements of Directors of M/s. AIPL, customers i.e. Rolling Mills, ingot brokers, CTD bars brokers and of transporters were also recorded. It was found that M/s. AIPL was destroying private records showing excess receipt of raw material, production therefrom and clearance of the finished products at the end of each month, and therefore, there were no past records of clandestine clearance except for the months of August-September 2004. Therefore, in order to ascertain suppression of production and clearance in the past, an analysis on the basis of mean average electricity consumption per MT was undertaken to arrive at the clandestine production. The department adopted the mean average of electricity consumption of 700 KWH PMT based on records maintained by M/s. AIPL for the period upto August 2004. On the basis of the above, show cause notice proposing recovery of duty of Rs. 2,05,55,472/- and Education Cess of Rs. 68,412/-, confiscation of excess stock, proposing penal action, proposing liability to confiscation of MS ingots found short and admittedly cleared clandestinely ....
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....ess scrap of 3733.664 MT and worked out the excess production as 3210.95 MT on this basis. However, the duty demand has not been worked out on this basis, as seen from Annexure-E to the show cause notice. In para 54 of the order, the Commissioner has relied on actual procurement of scrap weighing 1770.105 MT in August, 2004, whereas the statutory records reflect only a quantity of 1244.125 MT, resulting in a difference of 522 MT. However, this excess quantity cannot result in excess production of 822 MT as alleged and confirmed for the month of August, 2004. Therefore, the adjudicating authority has not proceeded on the basis of scrap procurement for determining quantity of production and consequent duty demand. The sole basis for arriving at the quantum of production during the period up to August, 2004 is the electricity consumption at the average rate of 700 per MT, which has been adopted on the basis of private records maintained for the month of August, 2004. Even if this is held to be a valid basis for computing duty demand for August to September 2004, it cannot be applied retrospectively for the past period as held by the Tribunal in M/s. Arti Leathers (P) Ltd. v. CCE [2001....
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....Power consumption per ton depends on scrap yield and size of scrap (scrap density decide feeding rate). So, average of every month cannot be same due to these variations Electrical Power from Electricity board also varies every hour. Some times input voltage is higher and other time is lower which affects melt rate. Breakdowns and power cuts are also responsible for average production and power consumption. For example: if power fails from Electricity Board in middle of heat, so metal solidifies and again needs power to re-melt. Furnace size is also responsible for power consumption. In bigger Furnaces scrap feeding is easier & Electrical efficiency improves. Due to these reasons, we are not responsible for melt rate & power consumption and no fixed data can be treated". 5. The figure of 700 KWH/MT adopted for calculation of demand is also not correct, according to Shri Sanjeev Bansal, Senior Service Engineer of M/s. Megatherm Electronics (P) Ltd. He has stated that approximately 725 to 925 KWH units of electricity are required to manufacture 1 MT of ingots. If the figure of 925 KWH is adopted, then there would be no excess production. As per the appellants' record, their avera....
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....nace oil consumption of 50 Ltrs PMT of finished products was set aside by the Tribunal inter alia relied upon its earlier order in Nav Karnataka Steels Pvt. Ltd. v. CCE (Final Order No. 1297-1304/07 dt. 16-11- 2007) [2008 (225) E.L.T. 454 (Tri.)]. The relevant extracts from the above order are reproduced below :- "4. We agree with the appellant that no demand can be confirmed only on the basis of Furnace Oil consumption, in the light of the Tribunal's recent order in Nav Karnataka Steels Pvt. Ltd. v. CCE-Final Order No.1297-1304/07 dated 16-11-2007. In that case also evidence of clandestine removal involving duty of Rs. 12,40,730/- existed and the assessee accepted this demand and did not contest the same and the Tribunal confirmed this demand. The total demand raised was Rs. 4,57,49,000/- (including the above figure of Rs.12,40,730/-) based on Furnace Oil consumption. The Commissioner adopted the SION norm at the rate of 58 litres of Furnace Oil per MT of finished product was adopted for demanding duty, which demand was set aside by the Tribunal. The relevant portion of the Tribunal's order is re-produced below:- ……… …….... 5. The Triveni Rubber case decision has bee....