Custom, Excise & Service Tax Tribunal
C.C.E., Jaipur I vs Natani Rolling Mills (P) Ltd on 28 October, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing:18.10.2016 Date of pronouncement :28/10/ 2016 Central Excise Appeal No.57041 of 2013 Arising out of the order-in-original No.88/2012 (CE)-Commissioner dated 28.12.2012 passed by the Commissioner of Central Excise , Jaipur I. C.C.E., Jaipur I .. Appellant Vs. Natani Rolling Mills (P) Ltd. Respondent
Appearance:
Present Shri R.K. Manjhi, A.R. for the appellant None for the respondent Coram: Honble Mr. Justice (Dr.) Satish Chandra, President Honble Mr. B. Ravichandran , Technical Member Final Order No.54832/2016 Per B. Ravichandran:
Revenue is in appeal against the order dated 28.12.2012 of Commissioner of Central Excise , Jaipur I.
2. The respondents herein are engaged in the manufacture of M.S. Rolled products, liable to central excise duty. Officers of Central Excise conducted search and follow-up investigation against certain suppliers of MS ingots. During follow-up investigation , it was revealed that certain quantities of MS ingots were received by the respondent without accounting and later used in the manufacture and clearance of MS rolled product without payment of duty. On completion of the investigation , a duty demand of Rs.3,34,81,436/- was issued to the respondent along with proposal to impose various penalties under Rule 25 of the Central Excise Rules, 2002. On adjudication of the case, the original authority has dropped the demand as unsustainable.
3. We have heard the ld. A.R. for Revenue. None appeared on behalf of the respondent. In the appeal, the Revenue submitted that the case against the respondent is based on private records resumed from the office premises of supplier of ingots. Though the Director of the respondent company denied receipt of such ingots the evidence collected from the supplier has rightly been relied upon by the Department. It was submitted that sufficient evidence is there for receipt of 60.16 MT of MS ingots by the assessee from M/s Nirmal, Jaipur which was later used by the respondent for clandestine manufacture and clearance of dutiable items. The finding of the Commissioner was also contested regarding electricity consumption by the respondent. It is the case of the Revenue that power consumption for average yield has been worked out based on the actual production of goods shown in the accounts of the respondent. Reliance placed by the Commissioner in the case of R.A .Castings Ltd. vs. C.C.E, Meerut 2009 (237)ELT 674 (Tri - Del.) as questioned by Revenue as not proper and correct. It was submitted that whole evidence available in the case are sufficient to confirm the duty demand.
4. It is seen that case of duty demand in the present case was mainly based on quantification of duty worked out on the basis of consumption of electricity in the factory of another unit. Such calculation was applied to the unit of the respondent to arrive at duty short paid. We notice that the original authority examined in detail the allegations made in the show cause notice before its finding. The first point is relating to receipt of 60.16 MTS of MS ingots in accounting from M/s Nirmal. It is recorded that the Director of respondent denied any such receipt and there is no corroborative evidence whatsoever to show movement of such raw material to the assessee. No evidence has been produced regarding receipt of unaccounted raw material in the form of transport detail or cash payment etc. It was concluded that merely some entries in private record of third party cannot establish unaccounted receipt of inputs by the manufacturing unit of the respondent. The impugned order relied upon various case laws in this regard.
5. The main basis of the demand by Revenue is the calculation based on electricity consumption of the respondent. The consumption norm of 102.09 units PMT for rolled product was the basis to demand duty. This norm has been arrived at based on investigation carried out in another unit - M/s Shree Sharma Steel Rolling Mills Pvt. Ltd., Jaipur. In that case, the norms were arrived at based on consumption for two months only. The original authority recorded that electricity consumption PMT of rolled product in Rolling Mills are different and no assessment was done on the basis of electricity consumption. At some place it was reported as high as 700 units PMT. The Commercial Tax Department of Rajasthan has optional compounded levy scheme for assessing sales tax on the basis of electricity consumption of 180 PMT for rolled product. Power consumption norms were fixed differently for different sizes of unit. These points were examined by the original authority to conclud that there are various factors which influenced the electricity consumption and there is no universal or uniformly acceptable standard for quantum of electricity to be consumed PMT of rolled products. Regarding reliance placed on the decision of the Tribunal in the case of R.A. castings Ltd. (supra) we find that there is nothing wrong in applying the ratio of the decision which was upheld by the Honble Allahabad High Court and also by Honble Supreme Court. Further, we note that the original authority extensively examined various case laws and the available evidence in the present case before arriving his decision. We find that in the present case, Revenue has not brought out any point of substance to persuade us to arrive at a contrary decision. Accordingly, we find no merit in the present appeal and dismiss the same.
(Pronounced in the open Court on 28/10 2016) (Justice Dr. Satish Chandra) President (B. Ravichandran) Technical Member scd/ Appeal No.57041/2013 1