AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 757
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....peal 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 4,65,889 4,65,889 E/20225/2024 C.No.V/28/15/22 /2016 Adjn B.II dt. 09.08.2016 (SOD No.56/2016) 82/2016 dt.30.12.2016 16,21,912 16,21,912 Appeal filed by the Revenue E/3109/2011 C.No.V/28/15/7 3/2010 Adjn. BNGII dated 04.08.2010 No.15/2011 dt. 30.08.2011 passed by the Commissioner of Central Excise NA NA ....
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....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 the same. 2.4 Further, he has submitted that the SION norms have been published for the purpose of implementation of various export schemes under the Foreign Trade Policy, where there is a requirement to determine the quantity of final product to be exported corresponding to the inputs imported/proposed to be imported or to determine the quantity of inputs used/contained in the product exported or to be exported. He has....
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....ed 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 interest for the period of five years alleging suppression of clandestine removal of the final product and also imposed penalty mainly based on the production approximation and on the statement of Director of the unit, Shri Agarwal, who is one of the appellants in this case. 6.2 The department has not gone beyond the approximation and the statement of Shri Agarwal. Any prudent person would not so conclude on extra production by approximation a....
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....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, spanning seven years, the department has not been able to lay hands on records or documents showing or suggesting clandestine production and clearance of the finished goods by the assessee in such a large scale as to warrant demands totalling about Rs. 10 crores. In the absence of evidence, we cannot sustain a finding of excess production and clearance involving the duty confirmed against the assessee. We find that the assessee's premises were searched on 2-9-2004. After investigation and aft....
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....m 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) 1427 KWH/T as per the report of NISST, Mandi, Gobindgarh given in June-July, 2006; (iv) 650 units to 820 units/MT as per the Executive Director, All India Induction Furnace Association, New Delhi; (v) 851 units/MT in the case of Nagpal Steel v. CCE, Chandigarh reported in 2000 (125) E.L.T. 1147. 21. ... ... ... 22. ... ... ... 23. The Tribunal has consistently taken the view that wherever electricity consumption alone is adopted as the basis to raise demands, the order of the lower authorities have been held to be unsustainable....