CEA No.119 of 2010 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.E.A.No.119 of 2010 (O&M) Date of decision: 24.8.2010 Commissioner, Central Excise Commissionerate, Central excise House, Ludhiana -----Appellant Vs. M/s Bhiwani Shanker Castings Limited, Jalandhar ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Gurpreet Singh, Senior Standing Counsel for the revenue. Adarsh Kumar Goel,J. 1. This appeal has been preferred by the revenue under section 35G of the Central Excise Act, 1944 (for short, ‘the Act’) against order dated 17.2.2009 passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi, proposing to raise following:- i) Whether the kind of excessive quantum of electricity consumed can be linked to production and no further corroboration is required? ii) Whether the findings of the Tribunal are perverse upsetting the well reasoned orders of the authorities below? iii) Whether even after expressing its serious doubts on the quantum of consumption of electricity vis-à-vis quantum of production recorded, the Tribunal is justified in observing that there is no corroborative evidence? 1 CEA No.119 of 2010 2. The respondent assessee is manufacturer of MS Ingots. On 2.8.2000, Preventive staff of the department visited the factory premises of the respondent and examined production records. A Show Cause Notice was given alleging clandestine removal inferred on the basis of alleged disproportionate consumption of electricity. After considering the stand of the respondent, demand of Rs.7,42,357/- alongwith interest and penalty was raised, which was partly upheld on appeal but on further appeal, the Tribunal set aside the demand by recording the following finding:- “We have carefully considered the submissions from both sides. There is allegation that electricity consumption is highly disproportionate to the production recorded. We note that no other evidence to substantiate the unaccounted production of steel ingots and clandestine removal of the same have been relied upon. The statement taken from the authorized signatory merely refers to the time required for completion of ‘a heat’ which is reportedly between 2.45 hours to 3 hours. No other investigation on the relevant issues appears to have been taken. In reply to the Show Cause Notice, the appellant has contested the charges and submitted that the production depends upon facts namely type of raw material used, labour employed, breakdown in machinery, erratic supply of electricity etc. The alleged quantum of electricity raises serious doubt in our mind also about the quantum of production recorded. The use of such excess quantity of electricity is being disputed by the appellant and they claimed that no meter reading to substantiate the same has been relied upon. There is no other evidence to indicate suppression of production and clandestine removal. The charge of suppression of production and clandestine removal is a serious one and could not be upheld on a mere alleged use of excess electricity, which has also been contested by the appellant.” 2 CEA No.119 of 2010 3. We have heard learned counsel for the revenue and perused the record. 4. It is clear from the finding recorded by the Tribunal that only material on the basis of which demand was raised was alleged disproportionate consumption of electricity which could be for various reasons and not necessarily for more production. Inference sought to be drawn that there was more production, was not justified. As pointed out by the Tribunal, the department had option to conduct further investigation and collect material to substantiate allegation of more production and clandestine removal. The finding recorded by the Tribunal cannot be held to be perverse in the circumstances. 5. No substantial question of law arises. 6. The appeal is dismissed. (Adarsh Kumar Goel) Judge August 24, 2010 (Ajay Kumar Mittal) ‘gs’ Judge 3