1. All the present appeals have been filed against the Order-in-Original No. 34/2007 dated 31.07.2007. Four appeals have been filed by the assessee as well as related parties, challenging the demand of Central Excise Duty as well as imposition of penalties on various persons. Revenue has also filed an appeal contending that the demand confirmed in the impugned order has omitted the month of November, 2001, which also falls within the extended period of 5 years.
2. The appellant-assessee is engaged in the manufacture of M.S. Ingots. Department received an intelligence regarding suppression of production by the manufacturers of M.S. Ingots in the form of a technical opinion of IIT Kanpur that an induction furnace unit should consume electricity in the range of 555 to 1046 units for the manufacture of 1 MT of MS ingots. To verify the same, the departmental officers called for the balance-sheet, income ledgers, documents relating to other income, electricity bills, etc for the period 2001-2006. After scrutiny of the details, the Revenue concluded that the assessee had consumed electricity in the range of 1395-2059 units for every 1 MT of MS Ingots. This was considered to be in excess of the suggested guideline by IIT Kanpur. It was further concluded that the selling price of the product of the appellant was below its cost and "other income" shown in the balance-sheet towards receipt by way of share trading and commodity trading were shown fictitiously. After conclusion of verification, SCN was issued and the impugned order was passed in which the assessee was held to have clandestinely cleared the finished products and the income generated from such clandestine clearance was being reflected in their balance-sheet as share trading and commodity trading. Accordingly, duty to the extent of Rs. 2.96 crores was demanded along with interest and penalty of equal amount. Penalties were also imposed on the Directors and other connected persons. Aggrieved by the impugned order, the present appeals have been filed.
3. With the above background, we heard Shri S. Sunil, Advocate on behalf of the appellants as well as Shri H. Saini, DR.
4. The Ld. Counsel for the appellants argued the case as summarized below:
i) The transactions relating to share trading, commodity trading etc., were duly entered in the financial accounts of the appellant, and were reflected in their IT returns, and were also duly audited by their CA.
ii) The raw material purchases, as well as sales of final products were duly accounted by the assessee for in its records.
iii) There was no evidence of any receipt, by the appellant, of unaccounted raw material.
iv) There was no evidence, or allegation, of disposal, by the appellant, of unaccounted ingots.
v) There was no evidence of any clandestine transportation either of inputs or of finished products, and no seizure thereof either.
vi) Electricity consumption depended on various factors.
vii) Consumption of electricity could not, therefore, be the sole basis to allege clandestine removal.
viii) The requisite evidence to establish clandestine removal, was not forthcoming.
ix) The report of Prof. N.K. Batra could not be relied upon, as his credentials were unknown; besides; the report was vague in many respects.
x) Cross examination of the persons whose statements had been relied upon in the SCN, as also of Dr. Batra, was requested, but not permitted.
xi) Since no experiment of electricity consumption was conducted by Revenue in the appellant's factory, no inference can be drawn against the appellant insofar as electricity consumption is concerned in production of M.S. Ingots (final product).
xii) Taking stock of identical contentions, advanced in the context of identical allegations, this Hon'ble Tribunal had, in a self-speaking judgment in R.A. Castings Pvt. Ltd. v. CCE, 2009 (237) ELT 674 (T) held th........