MOHAN STEELS LTD. Vs. CCE

JUDGEMENT

(1.) M/s. Mohan Steels Ltd., have filed the present appeal against Order -in -Original No. 34/2001 dated 31.12.2001 by which the Commissioner has confirmed the demand of Central Excise duty and has imposed penalty on the ground that they had manufactured and cleared clandestinely excisable goods without payment of duty.

(2.) Shri R. Swaminathan, learned Consultant, mentioned that the Appellants manufacture M.S. Ingots, bars and rods; that the raw materials mainly are M.S. scrap, sponge iron and ferro alloys; that the dispute relates to the alleged suppression of production and clandestine removal; that the proceedings were initiated by issue of a show cause notice dated 28.12.94 for demanding duty for the period from December 1989 to January 1993; that the Commissioner, under Order -in -Original dated 23.9.96 confirmed demand of Rs. 59.44 lakhs and dropped the remaining demand, on the basis the 11 kgs. of ferro alloys would be required to manufacture one M.T. of the final product; that the Commissioner also assumed that there could be consumption of power by theft which was not alleged in the show cause notice; that on appeal filed by them as well as Revenue, the Tribunal vide Final Order No. A 899 -901/2000 -NB dated 9.10.2000 set aside the Order and remanded the matter to the Commissioner with the direction that the Commissioner would furnish a copy of the report of the Indian Institute of Technology to both the sides and give the Appellants an opportunity of producing documents in their defence; that the Commissioner in the impugned Order, has confirmed the entire demand in the show cause notice based on the assumption that there could be manipulation of power consumption; he had assumed that the consumption of ferro alloys would be only 9 kgs. per M.T. of the final product and he ignored the report of experts on the ground that the same may not be relevant.

(3.) The learned Consultant submitted that taking the minimum consumption of 600 units per M.T. of steel ingots, their power consumption is as per requirement; that in the show cause notice issued to them, there is no allegation of any use of power in excess of the power supplied by the U.P. State Electricity Board and as reflected in the meter reading recorded by the Electricity Board; that the power is supplied through Sub -station which is manned 24 hours by the Electricity Board Officials; that thus there cannot be any allegation of excess consumption of Power against them; that the Commissioner has proceeded on the assumption/suspicion that they had successfully managed the manipulation of meter reading; that this assumption is incorrect and is not supported by the evidence on record. He, further, submitted that the said assumption is totally incorrect and there was no manipulation of the meter reading and there was no excess consumption of power is evident from the following: - -