Judgment:
S.S. Kang
Heard both sides.
2. The applicants filed this application for waiver of pre-deposit of duty of Rs. 17,99,999/-, interest and penalty.
3. The applicants are engaged in the manufacture of M.S.Rounds/Bars. Show cause notice was issued demanding duty alongwith interest and for penalty on the ground that the applicants were showing higher consumption of electricity for the production of final product. The adjudicating authority confirmed the demand and imposed penalty. The applicants filed appeal alongwith application before the Commissioner(Appeals) and the Commissioner(Appeals) directed the applicants to deposit the amount of duty confirmed within 10 days. As the applicants failed to comply with the condition of the stay order the appeal filed by the applicants was dismissed.
4. The contention of the applicants is that the average production of the applicants is almost equal to the experiment conducted in the factory. For 5 years the demand is almost 18 lakhs which comes to Rs.25,000/- per month. The applicants cannot be faulted for small variation in the electricity consumption during the period in dispute. There is no other evidence to prove clearance of goods without payment of duty. Hence the demand is not sustainable.
5. Revenue submitted that the applicants were showing higher consumption of electricity and suppressed the production and entries made in the balance sheet show that the cost of production of the goods is less than the assessable value and therefore, the applicants were suppressing the production. Revenue relied on the decision of the Bombay High Court in the case of Orange City Pvt.Ltd. where the assesses were directed to deposit an amount equal to 25% of the duty for hearing of the appeal.
6. In the present case, the demand is confirmed by taking into account the electricity consumption. The Tribunal in the case of Orange City Pvt.Ltd. after taking into account the decision in the case of R.K.Re-rolling Mills which is upheld by the Hon’ble High Court directed the assessee to deposit an amount equal to 50% of the duty and penalty for hearing of the appeal where the demand is confirmed on the same ground. The order passed by the Tribunal modified by the Bombay High Court vide order dated 20.11.11 and the assessee were directed to deposit 25% of the duty. In view of the order passed by the Hon’ble Bombay High Court, the applicants are directed to deposit an amount of Rs. 4,50,000/- (Rupees Four lakhs fifty thousand) within a period of eight weeks. On deposit of the said amount, pre-deposit of the balance amount of dues is waived and recovery thereof is stayed during the pendency of the appeal.
7. With the consent of both sides, we take up the appeal for disposal. We find that the Commissioner(Appeals) has not decided the assessee’s appeal on merits.
8. In view of the above, the impugned order is set aside and the matter is remanded back to the Commissioner(Appeals) for deciding the appeal on merits, on showing the deposit of the above mentioned amount and after affording an opportunity of being heard to the appellants. Both sides are at liberty to produce evidence before the Commissioner(Appeals) and the Commissioner(Appeals) will take into account the evidence so produced.
9. Appeal allowed by way of remand.