TaxTMI 
TaxTMI 
2026 (6) TMI 1296
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.... revenue's prayer for enhancement of duty. 2. The facts, in a nutshell, are that M/s. Saravana Alloy Steel Private Limited (for brevity, "SAPL") is engaged in the manufacture of non-alloy steel ingots and rolled products falling under Chapter 72 of the Central Excise Tariff Act, 1985. It has two units. The ingots procured from Unit I on a stock-transfer basis, as well as the ingots manufactured in Unit II, are captively consumed in the manufacture of CTD bars and rods. 3. Based on specific intelligence gathered by the officers of the Directorate General of Central Excise Intelligence, that SAPL was evading Central Excise duty by resorting to clandestine removal of excisable goods manufactured by it, search operations were conducted on 02.09.2004 at the factory premises of SAPL, the residence of the Managing Director of SAPL, and the premises of some of its dealers and raw material suppliers, and incriminating records/documents were seized. During the course of investigation, statements of several witnesses were recorded. 4. Subsequently, the investigation revealed that SAPL had clandestinely manufactured and cleared CTD bars. It was also found that the actual power con....
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....uld not be imposed on them under Section 11AC of the Central Excise Act, 1944 and also under Rule 25 of the Central Excise Rules, 2002. 7. The above two show cause notices were adjudicated by the Commissioner of Central Excise, Bangalore II Commissionerate by passing the following common Order-in-Original No. 9/2007 dated 30.04.2007 vide Annexure-B: (i) Confirmed the demand of duty of Rs. 8,25,48,632/- relating to the period from August 2001 to October 2006 i.e., covered in the two show cause notices dated 11.08.2006 and 29.01.2007 and ordered to be recovered from the assessee under proviso to Section 11A of the Central Excise Act, 1944. (ii) Appropriated the amount of Rs. 50,00,000/- already paid by the assessee against the demand of duty confirmed at (i) above. (iii) Imposed a penalty of Rs. 8,25,48,632/- on the assessee under Section 11AC of the Central Excise Act, 1944. (iv) Imposed a penalty of Rs. 5,00,000/- on the assessee under Rule 25 of the Central Excise Rules, 2001/2002. (v) Imposed a penalty of Rs. 2,00,000/- each on Sri S.Nagaraji and Sri N.Saravana under Rule 26 of the Central Excise Rules, 2001/2002. 8. Aggrieved by....
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.... instant appeal was heard by a Co-ordinate Bench of this Court on 04.09.2014 and was dismissed on the ground that any question relating to the value of goods for the purpose of assessment falls outside the purview of Section 35G of the Central Excise Act and squarely within the ambit of Section 35L of the Act, which is required to be determined by the Hon'ble Apex Court. Aggrieved by the said order, the revenue preferred Civil Appeal Nos. 2675-2679/2016 before the Hon'ble Apex Court. The Hon'ble Apex Court, by invoking its extraordinary power under Article 142 of the Constitution of India, set aside the order passed by the Co-ordinate Bench of this Court in CEA Nos. 34-37/2011 and 13/2012 and restored the appeals to the file of this Court, directing this Court to dispose of the same on merits. 15. Heard the learned counsel Sri Aravind V. Chauhan for the appellant and Smt Vani H., learned counsel for the respondent. 16. Apart from raising several contentions, learned counsel for the appellant primarily contended that the Tribunal had grossly erred in setting aside the demand on the ground that determination of clandestine production of steel ingots solely on the ba....
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....n grave injustice. As such, it was submitted that the impugned order is liable to be set aside, and the appeal be allowed. 19. Per contra, learned counsel for the respondent - SAPL, supporting the impugned order, contended that the Tribunal, on assessment of evidence and materials available on record, has passed a well-reasoned order which does not call for any interference by this Court. According to her, the Commissioner passed the Order-in-Original confirming a huge demand based on consumption norms recommended by one G.S. Hegde, without determining each furnace separately with reference to its capacity, size, make, and age. His report did not involve any test run of the machines and did not disclose any authority for arriving at the standard norm of 700-800 units for production of 1 tonne of ingots and 100-125 units for 1 tonne of CTD bars. In cross-examination, the said witness has categorically admitted the above aspects. 20. Further, it is stated that the conclusion was arrived at by the Commissioner based on the statement of the Managing Director of the company, and the said statements were subsequently retracted vide affidavit/retraction letter dated 03.11.2004. Acco....
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....able on record. 24. As all the questions of law raised are interrelated, they are dealt with and answered together. 25. As could be gathered from the records, it is not in dispute that the assessee company was engaged in the manufacture of ingots and CTD bars. It had two induction furnaces of 2.5 MT capacity each and two furnaces of 7 MT capacity each. The principal allegation against the assessee is that it indulged in large-scale evasion of duty by resorting to clandestine manufacture and removal of finished goods. To establish this allegation, the revenue has primarily relied upon the evidence stated to have been recovered by the Directorate General of Central Excise Intelligence, namely invoices used by SAS, alleged non-accountal of scrap purchased from three dealers, alleged under-valuation of scrap, data recovered from the computer of SAS, excess consumption of electricity beyond industry norms, and the statements of the Managing Director and other persons. 26. On careful examination of the Order-in-Original passed by the Commissioner, confirming a demand, it is seen that the demand was substantially founded on consumption norms furnished by one G.S. Hegde and one K.....