D.N. Patel, J. - (1.) This writ petition has been preferred challenging the show-cause notice dated 04.09.2014 (Annexure-1), issued by the Commissioner, Central Excise and Service Tax, Ranchi as well as the Order-in-Original passed by the Commissioner, Central Excise and Service Tax, Ranchi dated 19.01.2016 (Annexure-6), mainly on the ground that the show cause notice has been issued on presumption and surmises. The highest case of the department is that there is some possibilities of clandestine removal of the M.S. Ingot, which is a final product of this petitioner.
(2.) Factual matrix: This writ petitioner is manufacturing M.S. Ingot from sponge iron and they are manufacturing M.S. Ingot since long. Show cause notice dated 04.09.2014 was given by the Commissioner, Central Excise and Service Tax, Ranchi for the period running from August,2009 to March, 2014. Personal hearing in the case was held on 22.12.2015. The noticees have filed written submissions which was taken on record. Thereafter, the Order-in-Original was passed by the Commissioner, Central Excise and Service Tax, Ranchi on 19.01.2016(Annexure-6). Being aggrieved and dissatisfied by the show cause notice as well as by the Order-in-Original, the present writ petition has been preferred.
(3.) Arguments canvassed by the counsel for the petitioners: Counsel appearing for the petitioners submitted that there is gross violation of principle of natural justice. The documents which are referred to and relied upon, in the show cause notice like: a. Nucleus Group report; b. The All India Induction Furnace Association report, though were demanded, but, never supplied. The whole show cause notice is issued upon presumptions and surmises about unaccounted manufacturing of M.S. Ingots and clandestine removal of the final product and nothing has been proved by the respondents. Only on the basis of presumptions, the show cause notice has been decided. The consumption of electricity pattern which is referred in the show cause notice as well as in the Order-in-Original, is absolutely baseless. It is submitted by the counsel for the petitioner that looking to Annexure -RUD-7 as referred in para 4 of the show cause notice, reveals the electricity consumption per M.T., which is absolutely in consonance with the report given by the Joint Plant Commissioner constituted by the Ministry of Steel, Government of India and as per this report, the consumption can be 1800 KWH/T (as referred in paragraph no 20 of a decision reported in 237 ELT 674 in the case of R.A. Casting (Private) Ltd. v. CCE , case. Thus, there is no scientific survey carried out by the respondents which can lead to conclusive evidence of unaccounted manufacturing of M.S. Ingots and clandestine removal thereof. It is further submitted by the counsel for the petitioner that Dr. N.K. Batra's report has been referred every now and then, since 2003 onwards, by the respondents and there are no less than one dozen judgments in which it has been observed right from the learned Tribunal to the Hon'ble Supreme Court of India that electricity consumption per se cannot be relied upon by the respondents for proving clandestine removal of final product, because there is no set pattern for consumption of electricity. There are several reports given by more reliable institutions and persons than Dr. N.K. Batra, which have been referred in the aforesaid decisions of R.A. Castings. Cross examination of Dr. N.K. Batra is also not made available, despite the request was made. The respondents ought to have carried out experiment of consumption pattern of electricity at the factory premises of the noticee, which has been referred to paragraph no. 22 of the decisions of R.A. Castings Private Ltd, which has not been gone into by the respondents. The whole show cause notice is based upon presumptions and surmises. The burden of proof lies upon the respondents that there is clandestine removal of finished product, which has not been discharged, at all, by the respondents. It is also submitted by the counsel for the petitioners that the respondents are surprised about the loss sustained by the petitioner. Merely because there is a loss to this petitioner that does not mean that there is a clandestine removal. Counsel for the petitioners has further submitted that the respondents have also shown their surprise about the wages paid by this petitioner to its 40 employees. The respondents have never recorded the statement of any of the employee and the respondents have presumed that higher wages must have been paid by the petitioner in absence of any statement of any of the employee. Thus, on the basis of this presumption that the petitioner must be paying higher wages to its employees and therefore, there is clandestine removal. This is also a baseless conclusion arrived at, in the Order-in-Original. Counsel appearing for the petitioners has relied upon the decisions which are as under:- a. R.A. Castings decisions reported in 237 ELT 674 , which is confirmed by the Division Bench of Allahabad High Court reported in 2010(1) taxman.com. 342 (Allahabad), against which SLP preferred by the department, has also been dismissed, and b. W.P. No. 173 of 2014 decided on 22.04.2014 by the Calcutta High Court. Counsel for the petitioners has pointed out that in several similarly situated cases, in which Dr. N.K. Batra report has been referred and relied upon, for proving clandestine removal of the finished products, in the show cause, ultimately in the Orders-in-Original, the show cause notices have been dropped by the adjudicating authority itself. The similarly situated cases are as under:- a. Globe Steel & Alloys Pvt. Ltd, the Order-in-Original :02/Central Excise/commr/2015 dated 31.03.2015, copy whereof has been given by the counsel to the counsel for the respondents. b. M/s. Madhura Ingots & Steel Co. Pvt. Ltd. Order-in-Original:07/Central Excise/commr/2015 dated 19.05.2015. c. M/s. Jagannath Cement Works Pvt. Ltd being Order-in-Original:31/Denovo/Commr/2015 dated 15.12.2015. d. M/s. Kamsa Steel Pvt. Ltd. being Order-in-Original:33/commr/2015 dated 21.12.2015, and several other orders, copies of which have been given to this Court and given to the respondents. On the basis of aforesaid decisions, it is submitted by the counsel for the petitioners that electricity consumption pattern, is useless argument, on behalf of the respondents. Every now and then, such argument has been canvassed, in the Order-in-Original and the first adjudicating authority has dropped the baseless notice and whenever the first authority has confirmed such ground, the tribunals have passed the Orders and quashed such ground, like in the case of R.A. Castings Pvt. Ltd v. CCE , which is approved by the Allahabad High Court and SLP has been dismissed by the Hon'ble Supreme Court. It is further submitted that whenever Order-in-Original are passed as stated herein above, dropping the show cause notice, the same are placed before the committee, consisting of two chief commissioners and they are taking decisions, whether to prefer any further appeal or not and all aforesaid cases where the show cause notice has been dropped and the ground of the electricity consumption pattern has also not been approved, in the Order-in-Original, no appeal has been preferred by the department. Thus, it has become fashion with the respondent that arbitrarily in few cases, ground of Dr. N.K. Batra will be raised for few industries and for rest of the industries, no such ground is ever raised. Because of this N.K. Batra's report, several petitions have been filed and several decisions have to be given by the Courts. Counsel for the petitioners has submitted that even a circular has been issued, which is at Annexure-2 dated 26.06.2014 that whenever any decision has been finally accepted by the respondents-department, the same has to be followed in other cases. This circular has also not been followed in this case. In fact, the respondents could not prove the clandestine removal of the finished products viz. M.S. Ingots and hence show-cause notice dated 04.09.2014 as well as Order-in-Original dated 19.01.2016 which are at Annexure-1 and Annexure-6, respectively, may kindly be quashed and set aside.;