2009 (8) TMI 25

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rivate Limited Company and the second and third respondents are its Directors. The respondent 1 is engaged in the manufacture and production of CTD bars. A show cause cum demand notice was issued to the first respondent by the Joint Commissioner, Central Excise, Thane1 proposing recovery of excise duty of Rs.11,06,430 / alleging clandestine clearance by the respondents 1, 2 and 3 of 471.075 metric tonnes of CTD Bars valued at Rs.69,15,183/. The respondent 1 approached the Settlement Commission for settlement vide its application dated 8th July 2004. During the pendency of the proceedings before the Settlement Commission, the Joint Commissioner Central Excise issued an addendum /corrigendum dated 19th October 2004 for recovery of excise duty....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....confirmed by the Tribunal. No appeal has been filed and in our opinion rightly so, in view of the admission by the respondent 1 before the Settlement Commission. The short question that arises for our consideration is whether the Tribunal in any way erred in holding that the appellant had not proved the clandestine removal of any further goods as alleged for the addendum/corrigendum show cause notice dated 19th October 2004, and consequently setting aside the demand made therein. 4. Mr.R.V. Desai, learned Senior Advocate appearing for the Revenue took us through the order in original passed by the Commissioner of Central Excise, Thane dated 30^th December 2005 and submitted that the Tribunal was not justified in setting aside the well re....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....een produced and cleared as per the records, held that the balance quantity of C.T.D Bars must have been produced and clandestinely cleared by the respondent 1. The Commissioner accordingly held that respondent 1 was liable to pay Excise duty for the clandestine removal of C.T.D. Bars and the penalty as mentioned earlier. 5. Mr.Desai, supporting the decision of the Commissioner submitted that the Commissioner was entitled to estimate the production of C.T.D Bars on the basis of the consumption of the furnace oil. In support, he referred to and relied upon a decision of the Supreme Court in Triveni Rubber and Plastics Vs. Collector of Central Excise, Cochin 1994(73) E.L.T. 7. 6. We have perused the order of the Tribunal. In paragraph 3....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he norm. The assessee shall, if so required by the said officer, be called upon to explain any shortfall in production during any time as compared to the norm. If the shortfall is not accounted for to the satisfaction of the said officer, he may assess the duty due thereon to the best of his judgment, after giving the assessee a reasonable opportunity of being heard." When there is an allegation that the manufacturer has produced more goods and has clandestinely cleared them and the actual production is required to be estimated for the purpose of ascertaining normal production and clandestine removal, the Revenue is entitled to consider and have regard to the installed capacity of the factory, raw material utilization, labour employed, p....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Commissioner did not consider the figures of the basic raw material viz. M.S.Ingots consumed for estimating the production. He only relied upon the consumption of furnace oil which is used for firing the furnace in which M.S. Ingots were converted into the molten steel before production of C.T.D Bars. The respondent 1 had given reasonable explanation for higher consumption of the furnace oil. According to it, during the relevant period the furnace was damaged and had developed a large hold in the roof. This resulted in the loss of heat resulting in higher consumption of furnace oil. Extensive repairs were carried out to the furnace during the years 20022003 and 20032004. About Rs.44 lakhs were spent on the repairs to the furnace and the ....