TaxTMI 
TaxTMI 
2024 (6) TMI 757
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....he period involved, are narrated below. Appeal filed by M/s. Chemital Pvt Ltd Appeal No. SCN No. date OIO No. date OIA No. date Duty involved Penalty Imposed E/3078/2011 C.No. V/28/15/73/ 2010 Adin BNG.II dt.04.08.2010 15/2011 dt.30.08.2011 passed by the Commissioner of Central Excise NA 2,22,38,129 2,22,38,129 E/20318/2018 C.No. V/28/15/65/ 2014 Adjn B.II dt 30.01.2015 13/JC/PI/BII/2016 dt. 15.02.2016 511515/2017- CT dated 08.12.2017 46,65,840 46,65,840 E/20221/2024 C.No.V/28/15/08 /2015 Adjn B.II dt.03.02.2015 11,60,117 11,60,117 E/20222/2024 C.No.V/28/15/78/2015 Adjn. B.II dt.03.07.2015 25,23,608 25,23,600 E/20223/2024 C.No.V/28/15/24 /2014 P-1 TECH dt. 22.04.2016 64/2016 dated 12.08.2016 3,99,389 3,99,389 E/20224/2024 C.No.V/28/15/24 /2014 P-1 TECH dt. 27.06.2016 4,65,8....
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....g less purity. In these circumstances, the total quantity calculated on the basis of the fixed parameter and on theoretical basis is erroneous and the excess quantity so determined in contrast to the quantity accounted in the production register and the excess quantity alleged to have been removed, cannot be sustained. He submits that other than the data relating to zinc scrap, literally there is no other evidence by the department to substantiate the allegation of unaccounted production and removal of goods without payment of duty clandestinely. 2.3 He submits that in the erstwhile provisions of Central Excise Rules, 1944, Rule 173E empowered the Commissioner to determine the normal production and where actual production was less than such normal production, the assessee was required to explain the reasons thereof and if the reasons are not satisfactory, the proper officer has the authority to assessee the duty to the best of his judgment. No such provision exists under the present Central Excise Rules, 2002; therefore, applying theoretical basis of production in arriving at the production and clearances of zinc oxide from zinc scrap is incorrect and demand cannot be based on t....
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....ty of zinc oxide manufactured from zinc scrap and the difference in the calculated figure and the figure of production recorded in the statutory records be considered as clearance of zinc oxide clandestinely without payment of duty. 5. Undisputedly the appellants are using raw materials viz., zinc dross, skimming, zinc ingots and other zinc scraps for manufacture of zinc oxide. The department applying the SION norms has calculated the quantum of zinc oxide ought to have been manufactured and the excess quantity alleged to have been clandestinely removed. Such methodology has not been accepted by the Tribunal in similar circumstances in the case of Mittal Pigments Pvt. Ltd.'s case after analyzing the facts, it has observed as follows: "6.1 Further the department has not gone beyond the approximation of yield which they have shown as 70 to 84% in col. 3 of Annexure-A attached to the show cause notice and average yield overall had been shown as 77.60% which has been made the basis for issuance of the show cause notice (SCN) as well as for confirming the duty of Central Excise by the impugned order dated 19-5-2009. The department confirmed the duty demand along with interes....
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....ment, then manufacturing of extra goods is not possible..." The said judgment has been carried out in appeal before the Hon'ble Rajasthan High Court. Their Lordships after analyzing the whole issue including its report and principle of law on the issue upheld the order of the Tribunal. This Tribunal also in the case of M/s. Saravana Alloy Steel Pvt. Ltd. (supra) taking note of the principle laid down in various judgments held that demand based on theoretical consumption of electricity in demanding duty on the ingots cannot be sustained. The Tribunal in paragraph 8 held that: "8. We find that in the appellant's own case for earlier period i.e. from August 2001 to June 2007, this Tribunal has already decided the issue vide Final Order No.176-180/2011 dated 25.02.2011 reported as 2011(274) ELT 248 (Tri. Bang.)]. After analysing the principles of law on the issue, this Tribunal has observed as follows:- "21. It is settled principle of law that adverse conclusion cannot be arrived at against an assessee based on presumption. It is the onus of the department to prove clandestine manufacture and removal of goods from the factory. In the entire period of dispute,....
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....he impugned demands have no reliable basis and are liable to be set aside." Similarly, this Tribunal in R.A. Castings Pvt. Ltd. case (supra), more or less on similar circumstances, has observed as follows:- "19. The main question to be decided in the instant appeals here is whether the appellants during the period December 2001 to March, 2005 have actually manufactured M.S. Ingots in excess of what has been recorded in their statutory records and removed the said quantity clandestinely from their factory without payment of duty. The excess production has been worked out on the basis of electricity consumption for which the standard norms are imported from the report of late Mr. N.K. Batra, Professor of Material and Metallurgical Engineers, IIT Kanpur. 20. We find that the following reports have been referred to either by the appellants or the Revenue laying down the norms for the consumption of electricity for the manufacture of one MT of steel ingots : (i) 555 to 1046 (KWH/T) as per Dr. Batra's report; (ii) 1800 KWH/T as per the report by Joint Plant Committee constituted by the Ministry of Steel, Government of India; (iii) 142....