SanjaykumarRamkishan Mantri HUF, Jalna V. ACIT, Aurangabad

ITA 1591/PUN/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2450 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 26-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Rejection of books of accounts; Unexplained investment; Search and seizure; Principle of natural justice; Deemed to accrue or arise in india; Additional evidence; Cost of acquisition; Difference of opinion; Retraction; Revised return; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 69C; 40A(3); 143(3); 142(1); 153A; 234B; 260A; 145; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA , JM AND SHRI PRADIP KUMAR KED IA , AM ITA NO. 1591 /PN/201 2 ASSESSMENT YEAR : 2009 - 10 SANJAYKUMAR RAMKISHAN MANTRI (HUF), D - 57, ADDITIONAL MIDC, JALNA 431 203. PAN : AADHM9093C . APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1, AURANGABAD. . RESPOND ENT ITA NO. 1635 /PN/201 2 ASSESSMENT YEAR : 2009 - 10 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1, AURANGABAD. . APPELLANT VS. SANJAYKUMAR RAMKISHAN MANTRI (HUF), PROP. M/S DHANLAXMI RE - ROLLING MILLS, D - 57, ADDITIONAL MIDC, JALNA 431 203. D - 57, ADDITIONAL MIDC, JALNA 431 203. PA N : AADHM9093C . RESPONDENT ITA NO. 121 /PN/201 2 ASSESSMENT YEAR : 2007 - 08 SANJAYKUMAR RAMKISHAN MANTRI (HUF), D - 57, ADDITIONAL MIDC, JALNA 431 203. PAN : AADHM9093C . APPELLANT VS. THE ADDL. COMMISSIONER OF INCOME TAX, RANGE 1, AURA NGABAD. . RESPONDENT ITA NO. 684 /PN/201 2 ASSESSMENT YEAR : 2007 - 08 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1, AURANGABAD. . APPELLANT VS. MANTRI SANJAYKUMAR RAMKISHAN (HUF), PROP. M/S DHANLAXMI RE - ROLLING MILLS, D - 57, ADDITIONAL MID C, JALNA 431 203. PAN : AADHM9093C . RESPONDENT 2 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) ITA NO. 120 /PN/201 2 ASSESSMENT YEAR : 2008 - 09 SANJAYKUMAR RAMKISHAN MANTRI (HUF), D - 57, ADDITIONAL MIDC, JALNA 431 203. PAN : AADHM9093C . APPELLANT VS. THE ADDL. COMMISSIONER OF INCO ME TAX, RANGE 1, AURANGABAD. . RESPONDENT ITA NO. 685 /PN/201 2 ASSESSMENT YEAR : 200 8 - 0 9 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1 , AURANGABAD . . APPELLANT VS. MANTRI SANJAYKUMAR RAMKISHAN (HUF), PROP. M/S DHANLAXMI RE - ROLLING MILL S, D - 57, ADDITIONAL MIDC, JALNA 431 203. PAN : AADHM9093C . RESPONDENT ASSESSEE BY : SHRI S. N. PURANIK DEPARTMENT BY : SHRI (DR.) SANTOSH KUMAR DEPARTMENT BY : SHRI (DR.) SANTOSH KUMAR / DATE OF HEARING : 0 9 . 0 3 .201 6 / DATE OF PRONOUNCEMENT: 31 . 0 3 .201 6 / ORDER PER SUSHMA CHOWLA, JM : OUT OF THIS BUNCH OF THREE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE, TWO CROSS APPEAL ARE FILED AGAINST THE CONSOLIDATED ORDER OF THE CIT(A) RELATING TO ASSESSMENT YEARS 2007 - 08 AND 2008 - 09 DAT ED 04.01.2012 AGAINST THE RESPECTIVE ORDERS PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AND SECTION 143(3) OF THE ACT FOR ASSESSMENT YEAR 2008 - 09. FURTHER, CROSS APPEALS HAVE BEEN FILED AGAINST THE ORDER OF THE CIT(A) DATED 28.05.2012 RELATING TO ASSESSMENT YEAR 2009 - 10 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE ACT. 3 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 2. ALL THE THREE CROSS APPEALS RELATING TO THE SAME ASSESSEE ON SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE . 3. THE ASSESSEE HAS RAISED SIMILAR GROUNDS OF APPEAL IN ALL THE YEARS ON MERITS EXCEPT THE ISSUE RAISED BY THE ASSESSEE AGAINST INVOKING OF THE JURISDICTION UNDER SECTION 147/148 OF THE ACT IN ASSESSMENT YE AR 2007 - 08. SINCE THE FACTS IN ALL THE APPEALS ARE IDENTICAL, WE PROCEED TO DECIDE THE PRESENT APPEAL REFERRING TO THE FACTS IN ASSESSMENT YEAR 2007 - 08. 4. THE ASSESSEE IN ITA NO.121/PN/2012 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. THE REASSESS MENT ORDER PASSED U/S 143(3) RWS 147 IS BAD IN LAW AND TH E SAME MAY PLEASE BE CANCELLED. 2. THE LEARNED CIT(A) ERRED IN NOT QUASHING ASSESSMENT ORDER PASSED U/S 2. THE LEARNED CIT(A) ERRED IN NOT QUASHING ASSESSMENT ORDER PASSED U/S 143(3) RWS 147 OF INCOME TAX ACT. IT MAY PLEASE BE HELD THAT ASSESSMENT ORDER (IN ABSENCE OF NO TICE U/S 143(2) AFTER FILING RETURN IN RESPONSE TO NOTICE U/S 148) IS VOID AB INITIO AND TH E SAME MAY PLEASE BE ANNULLED. 3. THE LEARNED CIT (A) ERRED IN NOT QUASHING NOTICE U/S 148 ISSUED BY ASSESSING O FFICER. IT MAY PLEASE BE HELD THAT NOTICE ISSUED U/S 148 IS BAD IN LAW AND THE SAME MAY PLEASE BE QUASHED. 4. AS THE ASSESSMENT FRAMED BY ASSESSING OFFICER IS ALSO NOT ON THE BASIS OF MY HUF RETURNS, AS SUBMITTED IN RESPONSE TO 148 FOR THIS REASON ALSO ASSESSMENT ORDER IS BAD IN LAW. 5. WITHOUT PREJUDICE TO ABOVE GROUNDS, THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN REJECTING BOOKS OF ACCOUNTS AND IT IS PRAYED THAT PROFIT ARRIVED FROM AUDITED BOOKS OF A CCOUNTS MAY PLEASE BE ACCEPTED. 6. WITHOUT PREJUDICE TO ABOVE GROUNDS, THE LOWER AUTHORITIES WERE NOT JUSTIFI ED IN HOLDING THAT THERE IS SUPPRESSED PRODUCTION AND THEY HAVE ERRED IN ESTIMATING SUPPRESSED PRODUCTION BASED ON ELECTR ICITY UNITS CONSUMPTION BASIS. 7. THE LEARNED CIT (A) HAS ERRED IN CONFIRMING ASSESSING OFFICER'S ESTIMATE OF ALLEGED SUPPRESSED PRODUC TION WITHOUT ASSESSING OFFICER GRANTING THE COPIES MATERIAL RELIED BY ASSESSING OFFICER AND OPPOR TUNITY TO EXAMINE THE PARTIES. 8. WITHOUT PREJUDICE TO ABOVE GROUNDS, THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION OF RS 37,69,509/ - UNDER THE HEAD GROSS PR OFIT ON SUPPRESSED SALES AND THE SAME ADDITION MAY PLEASE BE DELETED. 9. WITHOUT PREJUDICE TO ABOVE GROUNDS, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION OF RS 9,06, 1 32/ - ON ACCOUNT OF UNDISCLOSED INVESTMENT FOR SUPPRESSED SALES AND THE SAME ADDITION MAY PLEASE BE DELETED. 10. ASSESSEE DENIES ITS LIABILITY OF INTEREST U/S 234 ABC OF INCOME TAX ACT AND THE SAME MAY PLEASE BE DELETED. 4 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 11. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY AND/OR WITHDRAW ANY OF THE GROUND/S DURING THE COU RSE OF HEARING AS OCCASION MAY DEMAND. 12. APPELLANT PRAYS FOR JUST AND EQUITABLE RELIEF. 5. THE REVENUE IN ITA NO.684/PN/2012 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS JUS TIFIED IN QUANTIFYING THE SUPPRESSED PRODUCTION @ 4% EVEN AFTER ACCEPTING THE FACT THAT THE ASSESSEE INDULGED IN CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF TAXES? 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A) WAS JUSTIFIED IN NOT APPRECIATING THE FACT THAT MANUFACTURING AND ADMINISTRATIVE EXPENSES ON THE UNACCOUNTED PRODUCTION WORKED OUT IN THE APPELLATE ORDER HAD ALREADY BEEN BORNE BY THE PRODUCTION SHOWN IN THE BOOKS OF ACCOUNTS? 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND WITHOUT PREJUDICED TO THE ABOVE, WITH REGARD TO ADDITION U/S. 69C THE CIT(A) IS CORRECT IN HOLDING THAT THE ADDITION SHALL BE SUM UP WITH THE ISSUE OF SUPPRESSED PRODUCTION? 4. THE ORDER OF THE A O BE RESTORED AND THAT OF THE CIT(A) BE VACATED. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY GROUNDS OF APPEAL. 6. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT SET OF CROSS APPEALS IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN TH E CASE OF SHREE OM ROLLING MILLS PVT. LTD. VS. ADDL.CIT IN ITA NOS.125 & 127/PN/2012 RELATING TO ASSESSMENT YEARS 2007 - 08 & 2008 - 09 VIDE ORDER DATED 15.07.2015. THE SAID DECISION OF THE TRIBUNAL WAS IN A GROUP OF STEEL RE - ROLLING MILLS AT JALNA. 7 . THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE, FURTHER, POINTED OUT THAT IN ASSESSMENT YEAR 2007 - 08 THE FIRST ISSUE IS WITH REGARD TO THE RE - ASSESSMENT PROCEEDINGS INITIATED AGAINST THE ASSESSEE UNDER SECTION 147/148 OF THE ACT AND IN ABSENCE OF ANY NOTI CE BEING ISSUE D UNDER SECTION 143(2) OF THE ACT, THE SAID RE - ASSESSMENT PROCEEDINGS WERE VOID . IN TH IS REGARD, ELABORATE SUBMISSIONS WERE 5 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) MADE BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WHICH WE SHALL REFER TO WHILE DECIDING THE ISSUE RAISED IN THE PRESENT CROSS APPEAL. 8 . BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.50,73,460/ - ON 31.10.2007. THE RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THE ASSESSEE WAS ENGAGED IN THE MANUFACTURE OF TMT / CTD BARS. INFORMATION WAS RECEIVED FROM THE OFFICE OF COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, AURANGABAD VIDE LETTER DATED 29.03.2010 BY THE ASSESSING OFFICER, THAT THE ASSESSEE HAD INDULGED IN MANUFACTURE OF FINISHED GOODS AND ITS REMOVAL WITHOUT PAYING EXCISE DUTY. THE ADJUDICATION ORDER OF THE COMMISSIONER OF CENTRAL EXCISE QUANTIFYING THE VALUE OF SUPPRESSED PRODUCTION OR EXCISE EVASION WAS RECEIVED BY THE ASSESSING OFFICER. FURTHER, INFORMATION WAS ALSO RECEIVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD IN ANOTHER MATTER IN CONNECTION WITH ACTION CONDUCTED BY THE DIRECTORATE GENERAL OF CENTRAL EXCISE INTELLIGENCE (DGCEI) CONFESSED AND ADMITTED TO CLANDESTINE REMOVAL OF FINISHED PRODUCTS WITHOUT EXCISE COVER BEFORE THE EXCISE AUTHORITIES. THE ASSESSEE IN THIS REGARD HAD MADE A PETITION BEFORE THE CENTRAL EXCISE & CUSTOMS SETTLEMENT COMMISSION FOR WAIVER OF PENALTY, INTEREST AND PROSECUTION. THE PETITION WAS ADMITTED AND DISPOSED OFF AND THE ASSESSEE MADE THE PAYMEN T OF EXCISE DUTY EVADED IN ACCORDANCE WITH NOTICES ISSUED BY DGCEI. THE ASSESSEE ALSO ADMITTED THAT RAW MATERIAL USED IN THE PRODUCTION OF FINISHED PRODUCTS WAS OBTAINED IN CASH FOR WHICH, NO RECORDS WERE MAINTAINED. SIMILARLY, THE RECEIPTS ON SALE OF FI NISHED PRODUCTIONS WERE ALSO IN CASH AND NOT ACCOUNTED FOR. THE AMOUNT OF INCOME ESCAPING ASSESSMENT ON ACCOUNT OF ASSESSEES ADMISSION BEFORE THE DIRECTORATE GENERAL OF CENTRAL EXCISE INTELLIGENCE (IN SHORT DGCEI) AND SUBSEQUENTLY THE CENTRAL EXCISE AN D CUSTOMS SETTLEMENT COMMISSION FOR THIS YEAR WAS RS.1,44,30,933/ - EQUIVALENT TO 790 MT OF GOODS REMOVED WITHOUT PAYMENT OF EXCISE DUTY. IN VIEW OF NEW INFORMATION BROUGHT ON 6 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) RECORD, THE ASSESSING OFFICER WAS OF THE VIEW THAT SUFFICIENT REASONS EXISTED FO R PRIMA FACIE FORMATION OF BELIEF THAT THE INCOME OF ASSESSEE HAD ESCAPED ASSESSMENT. THEREFORE, AFTER RECORDING REASONS FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT , TH E ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT TO THE ASS ESSEE ON 30.03.2010 DIRECTING THE ASSESSEE TO FILE RETURN OF INCOME IN 30 DAYS. HOWEVER, THE ASSESSEE DID NOT FILE THE RETURN OF INCOME OR FURNISH REVISED RETURN . SUBSEQUENTLY, NOTICE UNDER SECTION 142(1) AND 143(2), BOTH DATED 16.08.2010 WERE ISSUED TO THE ASSESSEE ALONG WITH QUESTIONNAIRE. IN RESPONSE TO THE VARIOUS NOTICES ISSUED, THE COUNSEL FOR THE ASSESSEE ATTENDED BUT NO BOOKS OF ACCOUNTS WITH ANY CIRCUMSTANTIAL EVIDENCES, PURCHASE & SALE , BILLS INCLUDING DOCUMENTS WERE PRODUCED FOR VERIFICATION. THE ASSESSEE WAS REQUESTED NUMBER OF TIMES FOR PRODUCTION OF VARIOUS DETAILS AND OTHER INCOMES SHOWN IN THE BOOKS OF ACCOUNTS. BUT THE ASSESSEE DID NOT DO SO. THEREAFTER, THE KARTA OF HUF OF THE ASSESSEE W AS ISSUED SUMMONS ON 02.12.2010 REQUIRING ATTEND ANCE ON 09.12.2010 AND WAS SPECIFICALLY ASKED TO PRODUCE THE BOOKS OF ACCOUNTS, PURCHASE & SALE, BILLS, VOUCHERS, ETC. FOR ASSESSMENT YEARS 2005 - 06 TO 2007 - 08 AND 2008 - 09. IN RESPONSE TO THE SAME, ADJOURNMENT WAS SOUGHT ON THE PLEA THAT HE WAS TO GO TO TI RUPATI AND THE DIRECTORS WERE COMING BACK ON 16.12.2010. ACCORDINGLY, THE ASSESSEE WAS GRANTED TIME TO APPEAR ON 18.12.2010. SINCE, IT WAS TIME BARRING MATTER, THE HEARING WAS FIXED ON HOLIDAY ALSO. ON THE SAID DATE, NONE ATTENDED NOR ANY WRITTEN COMMUN ICATION WAS MADE. HOWEVER, ON 20.12.2010 THE ASSESSEE HAD SUBMITTED A LETTER OBJECTING TO THE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT. THE OBJECTION RAISED BY THE ASSESSEE WAS DISPOSED OFF BY THE ASSESSING OFFICER VIDE SPEAKING ORDER DATED 23.12. 2010. ON 28.12.2010, THE ASSESSEE FURNISHED A LETTER STATING THAT BOTH THE DIRECTORS ATTENDED THE OFFICE OF THE ASSESSING OFFICER BUT THE ASSESSING OFFICER WAS NOT IN HIS OFFICE. THE ALLEGATIONS WERE REPLIED TO BY THE ASSESSING OFFICER VIDE LETTER DATED 28.12.2010. FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE, A FINAL OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO APPEAR ON OR BEFORE 30 TH 7 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) DECEMBER, 2010. ON THIS DATE, THE COUNSEL FOR THE ASSESSEE ATTENDED AND FURNISHED COPY OF AUDIT REPORT AND BALANCE SHEET. T HE ASSESS MENT THEREAFTER WAS COMPLETED ON THE BASIS OF EVIDENCES AVAILABLE ON RECORD AND THE AMOUNT OF INCOME ESCAPING ASSESSMENT ON ACCOUNT OF ASSESSEES ADMISSION BEFORE THE DGCEI AND SUBSEQUENTLY CENTRAL EXCISE AND CUSTOMS SETTLEMENT COMMISSION FOR THIS YEAR WAS RS.1,44,30,933/ - . 9 . THE ASSESSING OFFICER OBSERVED THAT INTELLIGENCE WAS GATHERED BY THE DGCEI, ZONAL UNIT, MUMBAI IN THE CASE OF SHRI SALASAR ISPAT PVT. LTD. AND MITC ROLLING MILLS PVT. LTD., MANUFACTURERS OF THERMO MECHANICALLY TWISTED (TM T) BARS. WE FIND THAT SIMILAR ACTION OF DGCEI WAS REFERRED TO BY THE TRIBUNAL IN THE RELATED CASE OF THE ASSESSEE I.E. IN M/S. SRJ PEETY STEELS PVT. LTD. VS. THE ADDITIONAL CIT IN ITA NOS.123 & 124/PN/2012 AND I N CROSS APPEALS FILED BY THE REVENUE IN ITA NOS.435 & 436/PN/2012 RELATING TO ASSESSMENT YEARS 2007 - 08 AND 2008 - 09 VIDE ORDER DATED 16.01.2015 . T HE FACTUAL ASPECTS OF THE INTELLIGENCE REPORT OF THE DGCEI HAVE BEEN REFERRED TO BY THE TRIBUNAL, WHICH ARE THE BASIS FOR CARRYING ON THE INVESTIGATION IN THE HANDS OF THE ASSESSEE BEFORE US. IN VIEW OF IDENTICAL INTELLIGENCE REPORT BEING RELIED UPON AS IN THE CASE OF SISTER CONCERN, FOR THE SAKE OF BREVITY, WE REFER TO THE FACTUAL ASPECTS OF THE CASE AS NOTED BY THE TRIBUNAL, WHICH READ AS UNDER: - 4.1 T HE ASSESSING OFFICER HAS OBSERVED THAT INTELLIGENCE WAS GATHERED BY THE DGCEI, ZONAL UNIT, MUMBAI, IN THE CASE OF SHRI SALASAR ISPAT (PVT.) LIMITED AND MITC ROLLING MILLS (PVT.) LTD., MANUFACTURERS OF THERMO MECHANICALLY TWISTED (TMT) BARS, THAT THEY WERE INVOLVED IN CLANDESTINE CLEARANCE OF FINISHED PRODUCTS THROUGH A BROKER, SHRI UMESH MODI, MUMBAI. AS NOTED BY THE ASSESSING OFFICER SEARCHES WERE CONDUCTED BY THE DGCEI ON 18 - 12 - 2006 AND VARIOUS INCRIMINATING DOCUMENTS WERE RECOVERED WHICH INDICATED CLAND ESTINE REMOVAL OF GOODS BY MANUFACTURERS OF TMT BARS BY MANUFACTURERS LOCATED AT JALNA. THE ASSESSING OFFICER ALSO REFERRED TO THE ADMISSION OF SHRI UMESH MODI BEFORE THE CENTRAL EXCISE AUTHORITIES THAT HE HAD ACTED AS A SUB - BROKER FOR SHRI ANIL D LINGADE , PROPRIETOR OF ANIL TRADERS, JALNA AND SHRI MUKESH GUPTA, PROPRIETOR OF R.J. STEEL TRADERS, NAVI MUMBAI, WHILE SOURCING TMT BARS. AS NOTED BY THE ASSESSING OFFICER THE SAID SHRI ANIL D. LINGADE ADMITTED THAT HE ACTED AS A BROKER FOR THE NINE MANUFACTURER S FROM JALNA WHICH DETAILS ARE GIVEN IN PARA NO. 2.2 OF THE ASSESSMENT ORDER. THEN THE ASSESSING OFFICER HAS DISCUSSED THE MODUS OPERANDI ADOPTED BY SHRI ANIL LINGADE IN PARA NO. 2.3 OF THE ASSESSMENT ORDER BUT AS THE NAME OF THE ASSESSEE IS NOT 8 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) THERE IN NINE LISTED PARTIES, HENCE, WE DO NOT CONSIDER IT NECESSARY TO GO IN THE DETAILS OF THE SAME. THE ASSESSING OFFICER HAS ALSO REFERRED TO ACTION TAKEN BY THE CENTRAL EXCISE AUTHORITIES AGAINST ONE SHRI FARUK SHAIKH, WHO WAS ALSO A BROKER FROM WHOM THE NAME OF THE ANOTHER BROKER SHRI PAWAN GARG OF JALNA WAS REVEALED. 4.2 IN SUM AND SUBSTANCE ALL THE ABOVE REFERRED INFORMATION WAS ON THE BASIS OF THE INVESTIGATION CARRIED OUT BY THE CENTRAL EXCISE AUTHORITIES AND THEY REMOVED THE TMT BARS WITHOUT PAYMENT OF THE LEGITIMATE EXCISE DUTY. THE ASSESSING OFFICER HAS ALSO DISCUSSED THE MODUS OPERANDI ADOPTED BY SHRI FARUK SHAIKH IN PARA NO. 2.5 OF THE ASSESSMENT ORDER BUT THAT IS ALSO BASED ON THE INVESTIGATION CARRIED OUT BY THE DGCEI. THE ASSESSING OFFICER A LSO REFERRED TO THE INVESTIGATION MADE BY DGCEI AND OBSERVED THAT THE MANUFACTURERS OF THE TMT BARS WERE CONFRONTED AND THE MANUFACTURERS ADMITTED THAT THEY HAD SUPPLIED TMT BARS TO THE BROKERS WITHOUT PAYING EXCISE DUTY AND THEY CONFIRMED THE MODUS OPERAN DI AS NARRATED BY SHRI FARUK SHAIKH AND SHRI PAWAN GARG. THE ASSESSING OFFICER HAS NOTED THAT CONSEQUENT TO ADMISSION BY THE SUPPLIERS OF UNACCOUNTED TMT BARS, THEY ALSO ADMITTED THAT THEY HAD MANUFACTURED THESE TMT BARS FROM RAW MATERIAL VIZ., INGOTS AND BILLETS FROM UNACCOUNTED RECEIPT OF RAW MATERIAL. AS OBSERVED BY THE ASSESSING OFFICER THE SUPPLIERS IDENTIFIED THE INGOTS/BILLETS FROM ALLEGED UNACCOUNTED RECEIPTS OF RAW MATERIAL. THE ASSESSING OFFICER HAS GIVEN THE NAMES OF THE PARTIES IN PARA NO. 2. 7 OF THE ASSESSMENT ORDER AGAINST WHOM THE INVESTIGATION WAS CARRIED OUT BY THE CENTRAL EXCISE AUTHORITIES AND THE NAME OF THE ASSESSEE APPEARS AT SL. NO. 10 WHO HAD ALLEGEDLY SUPPLIED INGOTS/BILLETS TO ITS SISTER CONCERN SHRI OM ROLLING MILLS PVT. LTD. TO THE EXTENT OF 288.500 MT. 4.3 ON THE BASIS OF THE INVESTIGATION MADE BY THE DIRECTORATE GENERAL OF CENTRAL EXCISE INTELLIGENCE (IN SHORT THE DGCEI) BY INITIATING SEARCHES AGAINST SOME BROKERS AND SUB - BROKERS THE CENTRAL EXCISE DEPARTMENT ISSUED SHOW CAUSE NOTICES TO THE ASSESSEE AND OTHER MANUFACTURES WHOSE NAMES WERE REVEALED DURING INVESTIGATION FOR EVASION OF EXCISE DUTY. THE NAMES WERE REVEALED DURING INVESTIGATION FOR EVASION OF EXCISE DUTY. THE ASSESSEE ADMITTED TO CLANDESTINE REMOVAL OF FINISHED PRODUCTS TO EXTENT OF 288.50 MT WITHOUT PAYMENT OF EXCISE DUTY. THE A SSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAD MADE A PETITION BEFORE THE CENTRAL EXCISE AND CUSTOMS SETTLEMENT COMMISSION ( HEREIN AFTER REFERRED TO AS THE SETTLEMENT COMMISSION) FOR WAIVER OF PENALTY, INTEREST AND IMMUNITY FROM THE PROSECUTION. THE SAID PETITION WAS ADMITTED AND DISPOSED OFF BY THE SETTLEMENT COMMISSION. AS NOTED BY THE ASSESSING OFFICER THE ASSESSEE ALSO ADMITTED THAT THE RAW MATERIAL USED IN PRODUCTION OF THEIR FINISHED PRODUCTS WAS OBTAINED IN CASH FOR WHICH NO RECORDS WERE MAIN TAINED. SIMILARLY, RECEIPTS ON SALE OF FINISHED PRODUCTS I.E. 288.50 MT OF BILLETS/INGOTS, TOO WERE ALSO IN CASH AND NOT ACCOUNTED FOR. 10 . THE DGCEI HAD GATHERED THE INFORMATION VIS - - VIS QUANTITY OF TMT BARS IN THE HANDS OF VARIOUS RE - ROLLING MILLS, W HICH WAS CONFRONTED TO THE MANUFACTURERS OF TMT BARS, WHO IN TURN ADMITTED THAT THEY HAD SUPPLIED TMT BARS TO THE BROKERS WITHOUT PAYING EXCISE DUTY AND THEY ALSO CONFIRMED THE MODUS OPERANDI REVEALED BY THE BROKERS. THE ASSESSEE BEFORE US I.E. SANJAYKUMAR RAMKISHAN MANTRI (HUF) , JALNA ADMITTED TO THE MANUFACTURE OF 748.620 MT OF TMT BARS, WHICH WERE CLANDESTINELY REMOVED WITHOUT PAYMENT OF EXCISE DUTY. THE STATEMENT OF SANJAYKUMAR RAMKISHAN MANTRI (HUF) PROPRIETOR OF DRL WAS RECORDED BY DGCEI 9 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) ON 08.01.200 7 , IN WHICH HE ADMITTED THAT HE WAS RESPONSIBLE FOR ENTIRE STATE OF AFFAIRS OF DRL AND NILESH STEEL AND ALLOYS PVT. LTD. HE FURTHER ADMITTED THAT DRL WAS ENGAGED IN THE MANUFACTURE OF TMT BARS OF VARIOUS SIZES FROM BILLETS. HE ALSO ADMITTED THE UNACCOUNT ED CLEARANCE OF TMT BARS, FOR WHICH NO RECORDS WERE MAINTAINED AND THE PAYMENTS WERE ALSO RECEIVED THROUGH CASH. HE FURTHER ADMITTED TO HAVE CLEARED 730.035 MT THROUGH SHRI PAWAN GARG AND 18.585 MT OF TMT BAR ALSO THROUGH ANIL LINGADE AND SHRI UMESH MODI , WITHOUT PAYMENT OF EXCISE DUTY AND HE AGREED TO MAKE PAYMENT OF RS. 24,85,884/ - BEING THE EXCISE DUTY ON CLANDESTINE SALES MADE BY HIM. HE FURTHER AGREED THAT RAW MATERIAL PROCURED FROM SISTER CONCERN WAS CLEARED WITHOUT PAYMENT OF EXCISE DUTY. FINAL SHO W CAUSE NOTICE WAS ISSUED BY EXCISE AUTHORITIES FOR PRODUCTION AND REMOVAL FOR VALUE OF RS.60,87,450/ - IN ASSESSMENT YEAR 2006 - 07 AND RS.73,84,150/ - IN ASSESSMENT YEAR 2007 - 08 . THE ASSESSEE THEREAFTER, APPROACHED THE CUSTOMS AND CENTRAL EXCISE SETTLEMENT COMMISSION FOR PAYMENT OF EXCISE DUTY AND GRANT OF IMMUNITY FROM THE PENALTY, INTEREST AND PROSECUTION. THE PETITION OF THE ASSESSEE WAS ADMITTED AND THE DUTY WAS PAID BY THE ASSESSEE. FURTHER, PENALTY OF RS. 25 ,000/ - WAS IMPOSED BY THE SETTLEMENT COMMISS ION. 1 1 . THE ASSESSING OFFICER AFTER GOING THROUGH THE PROCESS OF MANUFACTURE OF CTD BARS OR TMT BARS FROM INGOTS OR BILLETS BY THE RE - ROLLING MILLS IN PARA 5 .1 OBSERVED THAT THE VARIABLE ELECTRICITY CONSUMPTION IS IMPORTANT IN ARRIVING AT THE ACTUAL PR ODUCTION OF TMT / CTD BARS. THE ASSESSING OFFICER REFERRED TO THE DATA FOR ELECTRICITY CONSUMPTION FOR STEEL BAR MILLS IN USA, WHERE THE AVERAGE CONSUMPTION OF ELECTRICITY IN BAR MILLS WAS 132 165 KWH/TONNE AFTER ALLOWING FOR LOSSES AS IRRETRIEVABLE AND AS PER THE ASSESSING OFFICER, THE AVERAGE CONSUMPTION WAS 150 KWH/MT. THE ASSESSING OFFICER NOTED THAT T HE ROLLING MILLS AT JALNA USE THERMEX QUENCHING TECHNOLOGY WHICH IS THE LATEST TECHNOLOGY IN OFFER IN INDIA. SINCE THE INGOTS AND BILLETS USED IN P RODUCTION CONFORM TO THE STANDARDS FOR PRODUCING FE - 10 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 415, FE - 500 AND FE - 550 GRADE OF TMT AS PER INDIAN STANDARDS ISSUED BY THE BIS, THERE IS NO REASON TO SUSPECT THAT THE INHERENT QUALITIES OF THE BILLETS AND INGOTS USED WILL NOT BE ACCORDING TO STANDARD SP ECIFICATION. THE ASSESSING OFFICER THUS, AFTER ALLOWING AN ALLOWANCE OF 25% OVER AND ABOVE THE US COST OBSERVED THAT THE RANGE OF ELECTRICITY CONSUMPTION WOULD BE IN THE RANGE OF 169 KWH/MT TO 206 KWH/MT I.E. AVERAGE OF 188KWH/MT. THE ASSESSING OFFICER N OTED THE CONSUMPTION OF VARIOUS MANUFACTURERS IN JALNA CLUSTER DURING THE PREVIOUS YEARS RELEVANT TO ASSESSMENT YEARS 2006 - 07 TO 2008 - 09 AND WAS OF THE VIEW THAT THE AVERAGE RATE OF ELECTRICITY CONSUMPTION ACCORDING TO INTERNATIONAL STANDARDS AFTER GIVING HANDICAP OF 25% WAS 188KWH/MT AND THE AVERAGE MINIMUM CONSUMPTION IN THE PEER GROUP DURING THE THREE YEARS WAS 191 KWH/MT. THEREFORE, HE ADOPTED THE ELECTRICITY CONSUMPTION IN STEEL BAR ROLLING MILL AT 188KWH/MT OR THE CONSUMPTION OF THE ASSESSEE, IF LOWE R. AS PER THE ASSESSING OFFICER, THE ADOPTION OF THE SAID RATES BECAME IMPORTANT IN VIEW OF EVASION OF EXCISE DUTY BY TMT BAR MANUFACTURERS IN JALNA CLUSTER FOUND BY THE DGCEI, WHICH IN TURN, HAD BEEN ACCEPTED BY THE MANUFACTURERS. 1 2 . THE ASSESSING OFFI CER NOTED THAT THE ASSESSEE HAD DISCLOSED GROSS LOSS OF RS.27,84,177/ - FROM OPERATIONS AND PROFIT BEFORE TAX OF RS.51,71,231/ - . HOWEVER, THE ASSESSEE HAD ALSO COMMISSION INCOME OF RS.1,43,91,499/ - , PROFITS FROM TRADING IN MCX AND NCDEX OF RS.50,11,097/ - , PROFITS FROM COMMODITY TRADING OF RS.51,14,324/ - , ETC. AGGREGATING TO RS.1,95,05,413/ - . I N CASE THESE EXTRAORDINARY ITEM W ERE REMOVED , T HE ASSESSING OFFICER NOTED THAT THERE WAS A LOSS OF RS.1,43,34,182/ - . I N OTHER WORDS THE ASSESSEE WAS RUNNING THE MILL AT A LOSS OF RS.905/ - FOR EVERY MT OF PRODUCTION. IN VIEW OF THE SAME, THE ASSESSING OFFICER WAS OF THE VIEW THAT IT WAS NECESSARY TO ADOPT A FAIR VALUE OF ELECTRICITY CONSUMPTION IN KWH/MT AND COMPUTE THE SUPPRESSED PRODUCTION THEREON. SINCE THE ASSESS EE HAD ALREADY DEBITED ALL EXPENSES IN THE PROFIT & LOSS ACCOUNT, THE ASSESSING 11 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) OFFICER WAS OF THE VIEW THAT THERE WAS NO OCCASION TO COMPUTE THE GROSS PROFIT, HENCE THE ENTIRE PROFIT OF RS. 1,16,83,688/ - WAS CONSIDERED AS INCOME OF THE ASSESSEE. HOWEVER, ADDITION WAS MADE ON ACCOUNT OF ADMISSION OF THE ASSESSEE BEFORE THE EXCISE AUTHORITIES THAT HE HAD PURCHASED INGOTS IN CASH EQUAL TO 497 MT FOR A VALUE OF RS.73,84,150/ - FROM NILESH STEEL AND ALLOYS PVT. LTD. FOR UNACCOUNTED PRODUCTION RESPECTIVELY. SINC E THE ASSESSEE WAS FOUND TO HAVE INCURRED EXPENSES FOR WHICH NO EXPLANATION WAS OFFERED , T HE SAID AMOUNT WAS TREATED AS DEEMED INCOME OF THE ASSESSEE UNDER SECTION 69C OF THE ACT AGAINST WHICH NO DEDUCTION UNDER ANY HEAD OF INCOME WAS ALLOWED TO THE ASSESS EE. HOWEVER, NO SEPARATE ADDITION WAS MADE IN THE COMPUTATION SHEET , S INCE THE SAID AMOUNT SUBSUMED BY THE ADDITION ON ACCOUNT OF SUPPRESSED PRODUCTION. SIMILARLY, THE ADDITION WORKED OUT ON ACCOUNT OF DISALLOWANCE UNDER SECTION 40A(3) OF THE ACT WAS HEL D TO HAVE BEEN SUBSUMED BY THE ADDITION ON ACCOUNT OF SUPPRESSED PRODUCTION AND SEPARATE ADDITION WAS MADE ON THIS ACCOUNT. 1 3 . THE CIT(A) UPHELD THE REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT. WITH REGARD TO THE ADDITION MADE ON ACCOUNT O F SUPPRESSED PRODUCTION / SALES OF TMT BARS ON THE BASIS OF ELECTRICITY UNIT CONSUMPTION, THE CIT(A) HELD AS UNDER: - 7.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE RIVAL CONTENTIONS RAISED BY THE APPELLANT IN PARA 7.1 ABOVE AND RAISED BY T HE A.O. MENTIONED IN PARA - 5 ABOVE. ON PERUSAL OF THE SAME, IT HAS BEEN OBSERVED AS UNDER UNDER (1) THE APPELLANT HAS CLANDESTINELY REMOVED TMT BARS AND HAS EVADED EXCISE DUTY AND HAS NOT ACCOUNTED FOR THE SAID PURCHASES OF RAW MATERIAL AND ALSO SALE OF TMT B ARS AS IS EVIDENT FROM THE INVESTIGATION AND ENQUIRIES MADE BY DIRECTOR GENERAL OF CENTRAL EXCISE INTELLIGENCE (DGCEI). (2) THE APPELLANT HAS ALSO ADMITTED THE SAID CLANDESTINE REMOVAL OF GOODS IN THE STATEMENT RECORDED IN INVESTIGATION BY DGCEL AND ALSO BEFORE THE SETTLEMENT COMMISSION OF CUSTOMS AND EXCISE DEPARTMENT AND HAS PAID THE EXCISE DUTY AND THE SETTLEMENT COMMISSION HAS LEVIED TOKEN PENALTY IN RESPECT OF THE SAID CLANDESTINE SALE OUT OF THE BOOKS. 12 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) (3) THE A.O. HAS REASONABLY ESTIMATED, AFTER CONSIDERING VARIOUS REPORTS AND STUDIES IN - RESPECT OF ELECTRICITY CONSUMPTION REQUIRED FOR PRODUCING TMT BARS , AT 188 ELECTRICITY UNITS PER METRIC TON . THE A.O. HAS REASONABLY CONSIDERED THE 25% ALLOWANCE IN RESPECT OF TECHNOLOGY AND MACHINERY USED CONSIDERED THE 25% ALLOWANCE IN RESPECT OF TECHNOLOGY AND MACHINERY USED IN IND IA BY THE APPELLANT. (4) THE A .O . HAS ALSO POINTED OUT THAT THERE IS SUBSTANTIAL VARIATION IN VARIOUS MONTHS AND IN RESPECT OF VARIOUS MANUFACTURERS OF TMT BARS IN ELECTRICITY CONSUMPTION REQUIRED FOR THE QUANTUM OF GOODS PRODUCED, WHICH IS ABNORMAL. ( 5) THE DECISION IN THE CASE OF ACIT VS, SRJ PEETY STEELS PVT.LTD . / SHREE OM ROLLING MILLS PVT. LTD. (2011) 137 TTJ 627 (PUNE) HAS BEEN RELIED ON BY THE A PPELLANT. THE FACTS BEFORE THE HON'BLE ITAT WHILE DECIDING THE SAID CASES WERE DIFFERENT TO SOME EXTENT . IN THE SAID CASES, CLANDESTINE REMOVAL OF GOODS BY THE APPELLANT AND THE ADMISSION OF THE APPELLANT ABOUT THE SAID OF GOODS BY THE APPELLANT AND THE ADMISSION OF THE APPELLANT ABOUT THE SAID FACT OF UNACCOUNTED TRANSACTIONS WAS NOT BEFORE THE HON'BLE ITAT. FURTHER, THE DETAILED ORDER OF THE COMMISSIONER OF EXCISE AND THE OTHER F ACTS BROUGHT ON RECORD BY THE A .O . IN THE ASSESSMENT ORDER WAS NOT BEFORE THE HON'BLE ITAT, PUNE WHILE DECIDING THE ABOVE REFERRED CASES. FURTHER IN THE SAID CASES ACTION U/S 132 WAS CONDUCTED AND THE APPELLANT WAS ASSESSED U/S 153A OF THE ACT AND HENCE AD DITION IN RESPECT OF COMPLETED ASSESSMENTS IN SUCH CASES COULD BE MADE ONLY ON THE BASIS O F MATERIAL FOUND IN SEARCH ACTION . IN VIEW . OF THE ABOVE FACTS, THE RELIANCE P L ACED BY THE APPELLANT ON THE ABOVE REFERRED DECISION IS MISPLACED. FURTHER , THE OTHER D ECISIONS RELIED ON BY THE APPELLAN T IN SUPPORT OF ITS ABOVE CONTENTION ARE ALSO DISTINGUISHABLE ON FACTS AS IN THE SAID CASES THE CLANDESTINE REMOVAL OF GOODS WAS NOT PROVED AND ADMITTED AS IN THE CASE OF THE APPELLANT . FURTHER, THE REASONS FOR PROVED AND ADMITTED AS IN THE CASE OF THE APPELLANT . FURTHER, THE REASONS FOR ESTIMATING THE PRODUCTION ON THE BASIS OF ELECTRICITY UNITS CONSUMED WERE NOT PRESENT IN THE SAID CASES. (6) THE CONTENTION OF THE APPELLANT THAT THE BOOKS OF ACCOUNTS ARE REGULARLY MAINTAINED AND AUDITED CANNOT BE ACCEPTED IN VIEW OF THE CLANDESTINE REMOVAL OF GOO DS AND THE UNACCOUNTED PURCHASES AND SALES ADMITTED BY THE APPELLANT AND ALSO IN VIEW OF VARIOUS REASONS MENTIONED BY THE A.O. IN THE ASSESSMENT ORDER. 7.3 IN VIEW OF THE ABOVE FACTS, OBSERVATIONS AND DISCUSSION AND ALSO IN VIEW OF VARIOUS REASONS MENTION ED BY THE A.O. IN THE ASSESSMENT ORDER, I AM OF THE CONSIDERED VIEW THAT THE A.O. IS JUSTIFIED IN ARRIVING AT THE SUPPRESSED PRODUCTION/SALE OF TMT BARS ON THE BASIS OF ELECTRICITY UNIT SUPPRESSED PRODUCTION/SALE OF TMT BARS ON THE BASIS OF ELECTRICITY UNIT CONSUMPTION. THE FIRST ISSUE IS, THEREFORE, DECIDED AGAINST THE APPEL LANT. 1 4 . THE CIT(A) FURTHER ADDRESSED THE ISSUE OF QUANTIFICATION OF UNDISCLOSED INCOME BY REDUCING ONLY PURCHASE COST OF ALLEGED UNDISCLOSED SALES OR WHETHER THE GROSS PROFIT IS TO BE TAXED IN RESPECT OF THE SAID ALLEGED UNDISCLOSED SALES AND AT WHAT PERCENTAGE OF GP. THE CIT(A) WAS OF THE VIEW THAT ONLY GP IN RESPECT OF UNACCOUNTED SALES HAS TO BE ADDED IN THE HANDS OF THE ASSESSEE, IN TURN, RELYING ON THE RATIO LAID DOWN BY THE TRIBUNAL IN ACIT VS. SRJ PEETY STEELS PVT. LTD./SHREE 13 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) OM ROLLING MILLS P VT. LTD. (2011) 137 TTJ 627 (PUNE), WHEREIN IT WAS HELD THAT THE GROSS PROFIT IN RESPECT OF UNDISCLOSED PRODUCTION SOLD COULD ONLY BE TAXED. HOWEVER, IN VIEW OF THE ADMISSION OF CLANDESTINE REMOVAL OF GOODS AND UNACCOUNTED PURCHASE OF RAW MATERIALS AND SA LE OF FINISHED GOODS ADMITTED BY THE ASSESSEE, THE GROSS PROFIT FOR MANUFACTURE OF TMT BARS WAS ESTIMATED AT THE RATE OF 4%. FURTHER, IT WAS HELD BY THE CIT(A) THAT WHERE THE ACTUAL GROSS PROFIT AS PER THE BOOKS OF ACCOUNT IN THE YEARS UNDER APPEAL WAS MO RE THAN 4%, THE ACTUAL GROSS PROFIT RATE WAS TO BE ADOPTED AND DIRECTIONS TO THAT EFFECT WERE GIVEN TO THE ASSESSING OFFICER. THE CIT(A) FURTHER ESTIMATED THE UNDISCLOSED INVESTMENT IN RESPECT OF UNDISCLOSED TURNOVER AND WORKED OUT THE ADDITION AT RS.24,6 4,802/ - . HOWEVER, NO ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE BECAUSE OF THE ADDITION ON ACCOUNT OF ESTIMATED GP RATE IN THE PRECEDING YEAR I.E. ASSESSMENT YEAR 2006 - 07. THE CIT(A) UPHELD THE REJECTION OF BOOKS OF ACCOUNT UNDER SECTION 145 OF THE A CT. THE CIT(A) SIMILARLY UPHELD THE ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN RESPECT OF UNDISCLOSED TURNOVER TO THE EXTENT OF RS. 9,06,132/ - . 15 . THE NEXT ISSUE DECIDED BY THE CIT(A) WAS THE REOPENING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE ACT. THE CIT(A) VIDE PARA 10.2 10.3 HELD AS UNDER : - 10.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND RIVAL CONTENTIONS. THE A . O., HAS RECEIVED INFORMATION FROM THE OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, AURANGABAD VIDE LETTER DATED 29 TH MARCH, 2010 THAT THE APPELLANT HAD INDULGED IN MANUFACTURING OF FINISHED GOODS AND CLANDESTINE REMOVAL THEREOF WITHOUT PAYING EXCISE DUTY. THE A . O. HAS ALSO NOTICED THAT THE SAID CLANDESTINE REMOVAL OF FINISHED PRODUCTS AND PURCHASES OF RAW MATERIAL HAS BEEN PROVED IN THE ACTION CONDUCTED BY DIRECTOR GENERAL OF CENTRAL EXCISE INTELLIGENCE AND THE APPELLANT HAS ALSO ACCEPTED THE SAID FACT IN STATEMENT RECORDED IN INVESTIGATION CONDUCTED BY DG C EI AND HAS ALSO ACCEPTED THE SAME IN PROCEEDING S BEFORE THE SETTLEMENT COMMISSION. THE A.O. HAS APPLIED HIS MIND TO THE ABOVE FACTS OF THE CASE. THE A . O. HAS ALSO NOTICED THAT THE QUANTITY OF PRODUCTION SHOWN BY THE APPELLANT IS ON LOWER SIDE AND NOT COMMENSURATE WITH THE ELECTRICITY UNITS CONSUMED. TH E CONTENTION OF THE APPELLANT THAT THE A . O. HAS ACTED ON THE BASIS OF INFORMATION RECEIVED FROM EXCISE DEPARTMENT AND THERE IS ONLY A CHANGE OF OPINION CANNOT BE ACCEPTED AS A .O . HAVING INITIATED REASSESSMENT PROCEEDINGS SIMPLY ON THE BASIS OF INFORMATION RECEIVED FROM THE SURVEY CIRCLE OF THE DEPARTMENT WITHOUT INCORPORATING CORROBORATIVE MATERIAL AND HIS OWN SATISFACTION THAT INCOME HAS ESCAPED ASSESSMENT, ISSUANCE OF NOTICE U/S 148 WAS NOT VALID. IN THE CASE UNDER 14 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) APPEAL, THE A .O . HAS APPLIED HIS MIND TO THE INFORMATION RECEIVED FROM EXCISE DEPARTMENT AND HAS RECORDED HIS OWN SATISFACTION THAT THE INCOME HAS ESCAPED ASSESSMENT. (IV) THE RATIO LAID DOWN BY THE DECISION IN THE CASE OF SIR SHADILAL SUGAR MILL DECIDED BY THE HON'BLE APEX COURT IS TOTALLY DIFFERENT AND IS NOT RELEVANT IN THE CASE OF THE APPELLANT. 10.3 IN VIEW OF THE ABOVE FACTS AND DISCUSSION AND ALSO IN VIEW OF REASONS MENTIONED BY THE A. O ., I AM OF THE CONSIDERED VIEW THAT THE A .O . IS JUSTIFIED IN REOPENING THE ASSESSMENT OF THE EARLIE R YEARS. THE FOURTH ISSUE IS, THEREFORE, DECIDED AGAINST THE APPELLANT. 1 6. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PUT FO RWARD HIS CONTENTION AGAINST REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT . HOWEVER, THE ADJOURNMENT APPLICATION MOVED BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE WAS REFUSED , S INCE THE ISSUE ARISING IN THE PRESENT APPEAL WAS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASES OF VARIOUS RE - ROLLING MILLS AND THE ISSUE WAS ALREADY DECIDED BY THE TRIB UNAL. ON PERUSAL OF THE RECORD, VARIOUS PAPER BOOKS FILED BY THE ASSESSEE FROM DAY TO DAY AND THE ISSUE DECIDED BY THE TRIBUNAL IN THE CASE OF RE - ROLLING MILLS, WE PROCEED TO ADJUDICATE THE GROUNDS OF APPEAL RAISED IN THE PRESENT APPEAL. 17. THE FIRST ISSUE RAISED BY WAY OF GROUNDS OF APPEAL NO.1 TO 3 IS AGAINST THE INVOKING OF JURISDICTION UNDER SECTION 147/148 OF THE ACT. THE RELEVANT FACTS RELATING TO THE SAME ARE THAT THE ASSESSMENT IN THE HANDS OF THE ASSESSEE WAS COMPLETED UNDER SECTION 143(1) OF THE ACT. THEREAFTER, THE ASSESSING OFFICER RECEIVED INFORMATION OF CLANDESTINE REMOVAL OF TMT BARS AND EVASION OF EXCISE DUTY AND ALSO UN ACCOUNTED PURCHASES OF RAW MATERIAL AND ALSO SALE OF TMT BARS AS PER THE INVESTIGATION AND ENQUIRIES MADE BY THE DGCE I. THE ASSESSEE HAD ADMITTED TO THE SAID CLANDESTINE REMOVAL OF GOODS IN THE STATEMENT RECORDED DURING INVESTIGATION BY DGCEI AND ALSO BEFORE THE SETTLEMENT COMMISSION OF CUSTOMS AND EXCISE DEPARTMENT AND HAD PAID THE EXCISE DUTY AND THE SETTLEMENT COMMIS SION HAD LEVIED PENALTY IN RESPECT OF THE SAID CLANDESTINE SALE OUT OF BO OKS OF ACCOUNT. THE ASSESSING OFFICER , IN SUCH CIRCUMSTANCES, WAS OF THE VIEW THAT THE INCOME OF THE 15 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) ASSESSEE HAD ESCAPED ASSESSMENT AND CONSEQUENTIALLY REASONS WERE RECORDED AND NOT ICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 30.03.2010. THE ASSESSEE FAILED TO FURNISH ANY RETURN OF INCOME IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. THE COPY OF NOTICE ISSUED UNDER SECTION 148 OF THE ACT IN THE NAME OF PROPRIETARY CONCERN O F THE ASSESSEE HUF I.E. M/S DHANLAXMI RE - ROLLING MILLS IS PLACED AT PAGE 45 OF THE PAPER BOOK. THE REASONS RECORDED FOR REOPENING OF ASSESSMENT UNDER SECTION 147 ARE PLACED AT PAGE 47 OF THE PAPER BOOK. THEREAFTER, THE ASSESSMENT WAS ASSIGNED TO THE ADDL . CIT AS PER ORDER OF THE CIT WHICH IS PLACED AT PAGES 51 TO 53 OF THE PAPER BOOK FILED BY THE ASSESSEE. THE DESIGNATED ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 143(2) AND 142(1) OF THE ACT ALONG WITH DETAILED QUESTIONNAIRE DATED 16.08.2010, COPIES O F WHICH ARE PLACED AT PAGES 57 TO 63 OF THE PAPER BOOK. THE ASSESSEE WAS ALSO INFORMED THAT THE JURISDICTION OVER THE CASE HAS BEEN TRANSFERRED BY LETTER DATED 16.08.2010. IN REPLY THE ASSESSEE FURNISHED THE INFORMATION VIDE LETTER DATED 25.08.2010, COPY OF WHICH IS PLACED AT PAGES 67 TO 120 OF THE PAPER BOOK AND THEREAFTER ON 04.11.2010 FURTHER INFORMATION WAS FURNISHED BY THE ASSESSEE TO THE ASSESSING OFFICER ALONG WITH ANNEXURES, COPY OF WHICH IS PLACED AT PAGES 122 TO 133 OF THE PAPER BOOK. THE SUBJE CT OF THE SAID LETTER DATED 25.08.2010 FILED BY THE ASSESSEE IS S UBMISSIONS OF INFORMATION FOR COMPLETION O F INCOME - TAX ASSESSMENT OF THE INCOME - TAX ACT FOR ASSESSMENT YEAR 2007 - 08 ; WITH REFERENCE TO THE OFFICE NOTICE UNDER SECTION 142(1) DATED 16.08.2010 IN THE CASE OF SHRI SANJAYKUMAR R. MANTRI (HUF), PROPRIETOR OF M/S DHANLAXMI RE - ROLLING MILLS, JALNA . I T MAY BE POINTED OUT HEREIN THAT BOTH THE NOTICES UNDER SECTION 142(1) AND 143(2) OF THE ACT ALONG WITH QUESTIONNAIRE WERE ISSUED IN THE NAME OF M/S D HANLAXMI RE - ROLLING MILLS. THE ASSESSEE FILED EXTENSIVE REPLY TO BOTH THESE NOTICES ISSUED IN THE NAME OF PROPRIETARY CONCERN. THE ASSESSING OFFICER DIRECTED FOR PRODUCTION OF BOOKS OF ACCOUNT ALONG WITH SUPPORTING VOUCHERS, WHICH WERE NOT PRODUCED ON SE VERAL DATES OF HEARING. THEREAFTER, ON 10.11.2010, THE ASSESSEE INFORMED THE ASSESSING 16 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) OFFICER THAT THE ORIGINAL RETURN OF INCOME FILED UNDER SECTION 139(1) OF THE A CT ON 30.01.2007 MAY PLEASE BE TREATED AS RETURN OF INCOME FILED IN RESPONSE TO NOTICE UND ER SECTION 148 OF THE ACT. O N 10.11.2010 ITSELF, ANOTHER REQUEST WAS MADE FOR ISSUE OF COPY OF REASONS RECORDED FOR ISSUANCE OF NOTICE UNDER SECTION 148 OF THE A CT. ALL THESE REPLIES WERE FROM SHRI SANJAYKUMAR R. MANTRI (HUF), PROPRIETOR OF M/S DHANLAXMI RE - ROLLING MILLS. THE ASSESSEE HAS ALSO FURNISHED ON RECORD THE COPY OF THE ORDER - SHEET ENTRIES PERUSAL OF WHICH REFLECT THAT ON 25.11.2010 THE COUNSEL FOR THE ASSESSEE ATTENDED AND HE WAS REQUIRED TO FURNISH THE BOOKS OF ACCOUNTS AND EVIDENCES IN SUPPOR T THEREOF. ON THE NEXT DATE OF HEARING I.E. 09.12.2010, THE CASE WAS ADJOURNED AT THE REQUEST OF THE ASSESSEE AND FINAL OPPORTUNITY WAS GIVEN TO THE ASSESSEE ON 28.12.2010 FOR 30.12.2010 , ON WHICH DATE THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT TENDED AND FILED COPY OF AUDIT REPORT AND BALANCE SHEET BUT NO BOOKS OF ACCOUNT WERE PRODUCED AND THE CASE WAS HEARD . THE PERUSAL OF THE ASSESSMENT ORDER REFLECTS THAT THE ASSESSEE FAILED TO APPEAR ON VARIOUS DATES BEFORE THE ASSESSING OFFICER AND EVEN SU MMONS WERE ISSUED TO THE KARTA OF HUF FOR ATTENDANCE ON 09.12.2010 AND HE DID NOT APPEAR THEREOF. THE MATTER WAS ADJOURNED TO 18.12.2010 BUT AS LATE ON AS 20.12.2010, THE ASSESSEE SUBMITTED THE LETTER OBJECTING TO THE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSING OFFICER HAS DISPOSED OFF THE OBJECTION RAISED BY THE ASSESSEE VIDE OFFICE SPEAKING ORDER DATED 23.12.2010. THEREAFTER, ON 28.12.2010, THE ASSESSEE CLAIMS THAT BOTH THE DIRECTORS HAD ATTENDED THE OFFICE BUT THE ASSESSING OFFICER WAS NOT THERE, WHICH WAS REPLIED BY THE ASSESSING OFFICER BY LETTER DATED 28.12.2010 ITSELF. ON 30.12.2010, COUNSEL FOR THE ASSESSEE ATTENDED AND FURNISHED COPY OF THE BALANCE SHEET BUT DID NOT PRODUCE THE BOOKS OF ACCOUNT AND THE ASSESSMENT WAS COMPLETED ON THE BASIS OF EVIDENCE AVAILABLE ON RECORD. 17 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 1 8 . THE OBJECTIONS OF THE ASSESSEE BEFORE US ARE THAT THE ASSESSEE IS SHRI SANJAYKUMAR R. MANTRI (HUF) BUT THE NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED IN THE NAME OF DHANLAXMI RE - ROLLING MILLS. HOW EVER, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT THE CONCERN DHANLAXMI RE - ROLLING MILLS WAS SOLE PROPRIETARY CONCERN OF SHRI SANJAYKUMAR R. MANTRI (HUF) . FIRST OF ALL, NO SUCH OBJECTION WAS EVER RAISED BEFORE ANY OF THE AUTHOR ITIES THAT NOTICE UNDER SECTION 148 OF THE ACT HAS BEEN ISSUED TO WRONG PERSON. IN ANY CASE, THE ASSESSEE IS SOLE PROPRIETOR OF ITS CONCERN AND THE INVESTIGATION BY THE EXCISE AUTHORITIES WAS AGAINST THE SOLE PROPRIET ARY CONCERN OF ASSESSEE , HENCE, NOTICE FOR RE - ASSESSMENT WAS ISSUED IN THE NAME OF ASSESSEE. FURTHER, EVEN THE NOTICES UNDER SECTION 143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WERE ISSUED IN THE NAME OF SOLE PROPRIETARY CONCERN AND THE ASSESSEE HAD DULY PARTICIPATED IN ASSESSMENT P ROCEEDINGS AND FILED REQUISITE DETAILS O N DIFFERENT DATES OF HEARING. NOW, THE OBJECTION RAISED BY THE ASSESSEE AGAINST THE ISSUE OF NOTICE IN THE N AME OF SOLE PROPRIETARY CONCERN, WHICH ADMITTEDLY IS OWNED BY THE ASSESSEE HIMSELF, IS NOT MAINTAINABLE AND THE SAME IS DISMISSED. 19. ANOTHER OBJECTION RAISED BY THE ASSESSEE WAS THAT AFTER IT HAD FILED THE RETURN OF INCOME ON 10.11.201 0 , NO NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AND HENCE THE ASSESSMENT FRAMED FA ILS , FOR NON - ISSUANCE OF NOTICE UND ER SECTION 143(2) OF THE ACT AFTER THE FILING OF THE RETURN OF INCOME. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN THIS REGARD PLACED RELIANCE ON SERIES OF DECISIONS OF VARIOUS HIGH COURTS FOR THE PROPOSITION THAT AFTER THE RE - ASSESSMENT PRO CEEDINGS INITIATED, THEN THERE IS A REQUIREMENT TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT AFTER CONCERNED PERSON HAS FILED RETURN OF INCOME. IN THIS REGARD, WE WOULD AGAIN LOOK AT THE DATES OF EVENTS WHICH WE HAVE ALREADY REFERRED IN PARA S HEREINABO VE. THE STATUTORY NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 18 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 30.03.2010 WITH DIRECTION TO THE ASSESSEE TO FURNISH THE RETURN OF INCOME WITHIN 30 DAYS FROM THE DATE OF SERVICE OF THE NOTICE. THE ASSESSEE OMITTED ON ITS PART TO FURNISH ANY RETURN OF INCOME IN RESPONSE TO THE SAID NOTICE WITHIN A PERIOD OF 30 DAYS OR THEREAFTER. IN RESPONSE TO THE NOTICE UNDER SECTION 142(1) AND 143(2) OF THE ACT DATED 16.08.2010, THE ASSESSEE PARTICIPATED IN THE SCRUTINY ASSESSMENT AND FILED THE REQUISITE DETAILS. AT A VERY BELATED STAGE OF PROCEEDINGS ON 10.11.201 0 , FOR THE FIRST TIME THE ASSESSEE FILED A SIMPLE LETTER STATING THAT THE ORIGINAL RETURN OF INCOME FILED BY IT SHOULD BE TREATED AS FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE HA S NOW RAISED A TECHNICAL OBJECTION THAT AFTER 10.11.2010 SINCE NO NOTICE WAS ISSUED UNDER SECTION 14 3 (2) OF THE ACT, THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER I S BAD IN LAW. THE OBJECTION OF THE ASSESSEE IS REQUIRED TO BE ADDRESSED KEEPING IN MIND THE SCHEME OF THE ACT. IT WOULD BE PERTINENT TO NOTE THAT TO GIVE EFFECT TO THE NOTICE UNDER SECTION 148 OF THE ACT AND CARRY OUT ASSESSMENT, MECHANISM PROVISIONS VIZ. 143(2), 142(1), 131, 133A, ETC. OF THE ACT COME INTO PLAY. THESE PROVISIONS ARE REQUIR ED TO BE INTERPRETED IN A MANNER TO MAKE MACHINERY WORKABLE. IT IS NOT THE CASE HERE THAT NOTICE UNDER SECTION 143(2) OF THE ACT HAS NOT BEEN ISSUED AT ALL. THE ASSESSEE HAVING NOT COMPLIED WITH HIS PART OF OBLIGATIONS IS SEEKING TO ASSAIL THE POINT OF T IME OF ISSUE OF NOTICE. THE RETURN WAS DEEMED TO HAVE BEEN FILED BY ASSESSEE AT THE FAGEND OF LIMITATION PROVIDED. HE EXPE CTS THE STATUTORY FORMALITIES OF ISSUANCE OF NOTICE TO REDONE. IF SUCH PLEA IS ACCEPTED, IT WILL CALL THE ENTIRE MACHINERY AT THE W HIMS OF ASSESSEE LEADING TO INCURABLE ABSURDUM. IT WOULD BE RELEVANT TO NOTE IN THIS CONTEXT HERE THAT THE ASSESSMENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION CAME INTO MOTION ON 30.03.2010 GETS TIME BARRED BY STATUTORY LIMITATION ON 30.12.2010 . IN T HE GAMUT OF THE ENTIRE PROCEEDINGS, THE ASSESSEE CLAIM S THAT IT HA D FILED THE RETURN OF INCOME ON 10.11.2010 WHICH SHOULD BE RECOGNIZED AS FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT AND WHERE THEREAFTER NO NOTICE WAS ISSUED UNDER SECTION 143( 2) OF THE ACT, ASSESSMENT IS BAD . 19 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 20. WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE IN THIS REGARD. THE ISSUE IS TO BE LOOKED INTO FROM THE PERSPECTIVE OF THE PROVISIONS OF THE ACT AND WHETHER THE ASSESSEE HAD FOLLOWED THE SAME IN TRUE SPIRIT. THE REQU IREMENTS OF VARIOUS PROVISIONS OF THE ACT HAVE TO BE COMPLIED WITH AND IN CASE THE ASSESSEE FAILS TO COMPL Y WITH THE PROVISIONS , THE WHOLE MACHINERY OF ASSESSMENT FAILS AND THE ASSESSEE CANNOT BE ALLOWED TO DO SO. ON THE ONE HAND, THE ASSESSEE FURNISHES A LL THE INFORMATION FOR SCRUTINY ASSESSMENT BUT FAILS TO COMPLY WITH THE DIRECTION ISSUED BY THE ASSESSING OFFICER UNDER SECTION 148 OF THE ACT ON 30.03.2010 TO FILE RETURN OF INCOME WITHIN PERIOD OF 30 DAYS. THE ASSESSEE DOES NOT FILE ANY RETURN OF INCO ME . E VEN THEREAFTER , SCRUTINY ASSESSMENT PROCEEDINGS WERE TAKEN UP AND THE ASSESSEE HAD PARTICIPATED IN THE SCRUTINY ASSESSMENT PROCEEDINGS. THEREAFTER, T HE ALLEGED RETURN OF INCOME IS CLAIMED TO BE FILED VIDE LETTER DATED 10.11.2010 , BUT THE SAID RETURN OF INCOME FILED BY THE ASSESSEE IS AN INVALID RETURN AND NON - EST. THE RETURN OF INCOME WHICH WAS FILED BEYOND THE TIME ALLOWED UNDER THE ACT OR EVEN WITHIN REASONABLE TIME COULD HAVE BEEN ACCEPTED, BUT THE ASSESSEE CLAIMS TO HAVE FILED THE SAID RETURN AT THE FAGEND OF ASSESSMENT PROCEEDINGS AND SUCH A RETURN OF INCOME FILED BY THE ASSESSEE I S INVALID AND NON - EST AND THERE IS NO REQUIREMENT TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT. ACCORDINGLY, WE HOLD THAT THE RE - ASSESSMENT COMPLETED IN THE CASE I S VALID AND UNDER THE PROVISIONS OF THE ACT. THE ASSESSING OFFICER HAD ISSUED REQUISITE NOTICES OF HEARING TO THE ASSESSEE AND THE ASSESSEE HAVING PARTICIPATED IN THE SAID PROCEEDINGS, CANNOT BE AGGRIEVED AT THIS STAGE BY THE FACT THAT NO NOTICES UNDER SE CTION 143(2) OF THE ACT WAS ISSUED AFTER ALLEGED FILING OF THE RETURN OF INCOME BELATED LY . WE HAVE ALREADY HELD IN THE PARAS HEREINABOVE THAT THE SAID RETURN OF INCOME FILED BY THE ASSESSEE IS INVALID AND NON - EST AND HENCE, NO REQUIREMENT TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT. 20 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 2 1 . WE FIND SIMILAR ISSUE HAS BEEN ADJUDICATED BY US IN CHAWARA EDUCATIONAL TRUST VS. ITO IN ITA NO.849/PN/2014, ORDER DATED 20.01.2016 WHEREIN IT WAS HELD AS UNDER : - 7. SINCE THE ASSESSEE HAS QUESTIONED THE LEGALIT Y OF THE ASSESSMENT ORDER ITSELF WHICH AFFECTS THE JURISDICTION AND GOES TO THE ROOT OF THE MATTER, WE CONSIDER IT NECESSARY TO ADJUDICATE THE GROUNDS NO.1 AND 2 CONCERNING THIS BASIC ISSUE FIRST. TO BEGIN WITH, THE SHORT QUESTION BEFORE US IS WHETHER NON - ISSUANCE OF NOTICE UNDER SECTION 143(2) WILL INVALIDATE THE RE - ASSESSMENT ORDER FRAMED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT IN THE FACTS OF THE CASE SET OUT OR NOT. WE NOTICE THAT THE RETURN OF INCOME FILED DATED 09.03.2007 IS NOT A RETURN UNDER SE CTION 139(1) OR UNDER SECTION 139(4) OF THE ACT. THE RETURN HAS BEEN FILED BEYOND THE TIME LIMIT AVAILABLE UNDER THE SCHEME OF THE ACT AND IS THEREFORE NONEST AND INVALID IN THE EYES OF LAW. THIS POSITION OF LAW IS SUPPORTED BY JUDICIAL PRECEDENT IN THE CASE OF KUMAR JAGDISH CHANDRA SINHA VS. CIT, (1996) 220 ITR 67 (SC). 7.1 IN THE CONTEXT OF THE FACTS OF THE CASE, IT WOULD BE PERTINENT TO REFER TO SECTION 143(2) WHICH READS AS UNDER : - [ ASSESSMENT 143. [(1) XXXXX [(2) WHERE A RETURN HAS BEEN FURNISH ED UNDER SECTION 139, OR IN RESPONSE TO A NOTICE UNDER SUB - SECTION (1) OF SECTION 142, THE ASSESSING OFFICER SHALL, ASSESSING OFFICER SHALL, (I) WHERE HE HAS REASON TO BELIEVE THAT ANY CLAIM OF LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF MADE IN THE RETURN IS INADMISSIBLE, SE RVE ON THE ASSESSEE A NOTICE SPECIFYING PARTICULARS OF SUCH CLAIM OF LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF AND REQUIRE HIM, ON A DATE TO BE SPECIFIED THEREIN TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE OR PARTICULARS SPECIFIED THEREIN OR ON WHICH THE ASSESSEE MAY RELY, IN SUPPORT OF SUCH CLAIM: [ PROVIDED THAT NO NOTICE UNDER THIS CLAUSE SHALL BE SERVED ON THE ASSESSEE ON OR AFTER THE 1ST DAY OF JUNE, 2003;] (II) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE (I), IF HE CONSIDERS IT NECESSARY O R EXPEDIENT TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIVE LOSS OR HAS NOT UNDER - PAID THE TAX IN ANY MANNER, SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO ATTEND HIS OFF ICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN: [ PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR I N WHICH THE RETURN IS FURNISHED.]] 7.2 IT IS ALSO APPROPRIATE TO SIMULTANEOUSLY READ THE RELEVANT PROVISIONS OF SECTION 148 ALSO IN THIS CONTEXT WHICH IS READ AS UNDER : - 21 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) [ ISSUE OF NOTICE WHERE INCOME HAS ESCAPED ASSESSMENT. 148. [(1)] BEFORE MAKING THE ASSESSMENT, REASSESSMENT OR RECOMPUTATION UNDER SECTION 147, THE ASSESSING OFFICER SHALL SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, [* * *] AS MAY BE SPECIFIED IN THE NOTICE, A RETURN OF HIS INCOME OR THE INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR CORRESPONDING TO THE RELEVANT ASSESSMENT YEAR, IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRI BED; AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 :] [ [UNDERLINED FOR EMPHASIS BY US] 7.3 ON A COMBINED READING OF THESE AFORESAID TWO PROVISIONS, WE OBSERVE THAT WHEN THE ASSESSING OFFICER SERVES NOTICE UNDER S. 148 OF THE ACT, THE ASSESSEE IS REQUIRED TO FILE RETURN IN RESPONSE THERETO. THE PROVISIONS OF S. 148 SEEKS TO TREAT THE RETURN FILED IN RESPONSE TO NOTICE SERVED UNDER S. 148 AS RETURN FILED UNDER S. 139 OF THE ACT. THIS IS FOLLOWED BY NOTICE UNDER MACHINERY PROVISIONS OF S. 143(2) AND S. 142(1) TO ENABLE THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT. WE FIND THAT NEITHER ANY RETURN WAS FILED UNDER 148 OF THE ACT NOR ANY FORMAL REQUEST WAS MADE TO TREAT THE EARLIER RETURN FILED AFTER LAPSE OF STATUTORY TIME AS RETURN IN RESPONSE TO SUCH NOTICE. THUS, NO VALID RETURN IS ON RECORD FROM THE ASSESSEE EITHER UNDER S. 139(1) OR UNDER S. 139 (4) OR UNDER S. 148 OF THE ACT. IT IS A CASE OF THE REVE NUE THAT SINCE THE REQUIREMENTS OF SECTION 147/148 ARE DULY MET WITH, THE PROVISIONS OF SECTION 143(2) ARE RENDERED PROCEDURAL AND DOES NOT AFFECT THE VALIDITY OF THE ASSESSMENT. AS NOTED ABOVE, RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 IS DEEM ED TO RETURN FILED UNDER SECTION 139 AND ALL THE PROVISIONS OF THE ACT SHALL APPLY ACCORDINGLY. AS A CONSEQUENCE, THE NOTICE FOR ASSESSMENT HAS TO BE SHALL APPLY ACCORDINGLY. AS A CONSEQUENCE, THE NOTICE FOR ASSESSMENT HAS TO BE NECESSARILY ISSUED AS MANDATED UNDER SECTION 143(2) OF THE ACT IN SO FAR AS THE RETURN FILED IN RESPONSE T O S. 148 IS CONCERNED. 7.4 AS CAN BE SEEN, SECTION 143(2) PROVIDES THAT WHERE A RETURN WERE MADE IN SECTION 139 OR IN RESPONSE TO NOTICE UNDER SECTION 142(1), THE PROVISIONS OF SECTION 143(2) WILL COME INTO PLAY IN APPROPRIATE CASES. HOWEVER, IN THE SAME VAIN, WE NOTICE THAT THE ASSESSEE HAS NOT FILED ANY RETURN FALLING WITHIN THE AMBIT OF SECTION 139 AT ALL. THE RETURN FILED WAS NOT UNDER S. 142(1) OF THE ACT EITHER. THE RETURN FILED EARLIER ON 09.03.2007 IS ADMITTEDLY BEYOND THE STATUTORY TIME LIMIT AND IS THUS NONEST IN THE EYES OF LAW. THE ASSESSEE HAS NEITHER FILED ANY RETURN IN RESPONSE TO NOTICE U/S 148 NOR HAS REQUESTED THE ASSESSING OFFICER TO TREAT THE IMPUGNED NONEST RETURN TO BE TAKEN AS FILED AGAINST NOTICE UNDER SECTION 148 OF THE ACT. THEREF ORE, IMPUGNED NONEST RETURN DID NOT GET VALIDATED AT ANY STAGE. 7.5 SECTION 143(2) OF THE ACT MANDATES ISSUANCE OF NOTICE UNDER THIS SECTION ONLY WHEN THE RETURN IS FILED U/S 139 OR U/S 142(1) OF THE ACT. THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 IS ALSO TREATED AS RETURN FILED U/S 139 BY DEEMING FICTION. IN THE PRESENT CASE, SINCE THE RETURN HAS NOT BEEN FILED UNDER SECTION 139(1); OR UNDER SECTION 139(4); OR IN RESPONSE TO SECTION 148; OR IN RESPONSE TO SECTION 142(1); THE PROVISIONS OF SECTION 143 (2) DOES NOT GET TRIGGERED AT ALL. 7.6 WE FIND THAT JUDICIAL PRECEDENTS RELIED UPON ON BEHALF OF THE ASSESSEE IS OF BEREFT OF ANY ASSISTANCE AND ARE DISTINGUISHABLE ON FACTS. THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) AND ALL OTHER DECISIONS RELIED UPON BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE, THE RETURN WAS DULY FILED IN RESPONSE TO SECTION 148 OR A VALID UNDER SECTION 139 WAS IN EXISTENCE AND ON THESE FACTS THE HONBLE COURTS HAVE HELD THAT ISSUANCE OF NOTI CE U/S 143(2) IS MANDATORY AND CANNOT BE DISREGARDED AND BYPASSED. 22 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 7.7 IN THE PRESENT CASE, AS NOTED EARLIER, LAW ITSELF DOES NOT OBLIGE THE ASSESSING OFFICER TO ISSUE NOTICE U/S 143(2) IN THE ABSENCE OF RETURN U/S 139 OR U/S 142(1). CONCURRENTLY, WE NOTI CE THAT THE IMPUGNED ASSESSMENT WAS FRAMED AFTER PROPER OPPORTUNITY WERE AFFORDED TO THE ASSESSEE BY ISSUING NOTICE UNDER SECTION 142(1) IN SYNC WITH PRINCIPLES OF NATURAL JUSTICE. THEREFORE, WE DO NOT FIND ANY FORCE IN THE CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT NON ISSUANCE OF NOTICE UNDER SECTION 143(2) IS FATAL AND HAS VITIATED THE RE - ASSESSMENT ORDER AND RENDERED IT BAD IN LAW. TO REITERATE, WE TAKE NOTE OF THE FACT THAT THE ASSESSEE HAS APPEARED BEFORE THE ASSESSING OFFIC ER AND WAS IN ACQUIESCENCE AND PRIVY TO THE RE - ASSESSMENT PROCEEDINGS. THUS, INTEREST OF THE ASSESSEE IS NOT JEOPARDIZED IN ANY MANNER. OMISSION TO SERVE OR ANY DEFECT IN THE SERVICE OF THE NOTICE NOT STATUTORILY REQUIRED IN THE FACTS OF THE CASE WILL NOT, IN OUR VIEW, IMPINGE UPON THE LEGALITY OF IMPUGNED RE - ASSESSMENT ORDER. 2 2 . WE ARE IN AGREEMENT WITH THE PROPOSITION RAISED BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT IN CASE RETURN OF INCOME IS VALIDLY FILED IN RESPONSE TO NOTICE UNDER SECTION 148, THE REQUIREMENT OF THE ACT IS TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT . B UT ALL THE ACTS HAVE TO BE DONE WITHIN THE TIME FRAME PROVIDED UNDER THE ACT OR AT BEST WITHIN REASONABLE TIME. HOWEVER, IN THE PRESENT CASE, WE FIND THAT THE AS SESSEE HAD SHOWN TOTAL DIS REGARD TO THE PROVISIONS OF THE ACT . A S AGAINST THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT ON 30.03.2010 , WHERE THE RETURN OF INCOME WAS TO BE FILED WITHIN 30 DAYS AND ASSESSMENT WAS GETTING TIME BARRED ON 30.12.2010 , T HE ASS ESSEE FURNISHED THE ALLEGED RETURN OF INCOME ON 10.11.2010 WHICH IS NOT MAINTAINABLE AND THE SAME IS REJECTED BEING NON - EST . FURTHER, WE ALSO DISMISS THE PLEA OF ASSESSEE THAT RE - ASSESSMENT IS BAD IN LAW AS THE NOTICE UNDER SECTION 148 OF THE ACT WAS NOT ISSUED IN NAME OF ASSESSEE BUT ITS SOLE PROPRIETARY CONCERN. THE ACTION BY EXCISE AUTHORITIES WAS TAKEN AGAINST THE SOLE PROPRIETARY CONCERN IN WHICH CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY WERE DETECTED AND AFTER RECORDING OF REASONS FOR REOPENING UNDER SECTION 147 OF THE ACT, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED AND ASSESSMENT COMPETED, WHICH IS AS PER THE PROVISIONS OF THE ACT AND HENCE VALID. FURTHER, THE ASSESSEE HAD PARTICIPATED IN ASSESSMENT PROCEEDINGS, THOUGH HAD NOT FURNISHED COMPLETE DETAILS AND / OR PRODUCED BOOKS OF ACCOUNT, NO PREJUDICE IS CAUSED TO ASSESSEE . WE DISMISS THE PLEA OF ASSESSEE IN THIS REGARD. ACCORDINGLY, WE FIND NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE 23 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) ASSESSEE AGAINST RE - ASSESSMENT PROCEE DINGS COMPLETED UNDER SECTION 147 / 148 OF THE ACT. THUS, THE GROUNDS OF APPEAL NO.1 TO 3 ARE DISMISSED. 2 3 . NOW, COMING TO THE MERITS OF THE CASE . W E FIND THAT THE IDENTICAL ISSUE OF ESTIMATION OF INCOME IN THE HANDS OF ASSESSEE ON ACCOUNT OF ALLEGED SUPPRESSION OF PRODUCTION ON ACCOUNT OF VARIATION IN CONSUMPTION OF ELECTRICITY AROSE VIDE BUNCH OF APPEALS DECIDED BY THE TRIBUNAL OF BOTH FURNACE CASES AND RE - ROLLING MILLS. THE TRIBUNAL IN THE CASE OF RE - ROLLING MILLS I.E. SHREE OM ROLLING MILLS PVT. LTD. VS. ADDL. CIT IN ITA NOS.125 & 127/PN/2012, RELATING TO ASSESSMENT YEARS 2007 - 08 & 2008 - 09 I.E. APPEALS FILED BY THE ASSESSEE AND ITA NOS.430 & 431/PN/2012, RELATING TO ASSESSMENT YEARS 2007 - 08 & 2008 - 09 I.E. APPEALS FILED BY THE REVENUE & OTHER APPEA LS, CONSIDERED THE ISSUE AT LENGTH VIDE ORDER DATED 15.07.2015 (SUPRA) AND HELD AS UNDER: - 54. THE NEXT ISSUE IS THE WORKING OF THE SUPPRESSED PRODUCTION AND THE APPLICATION OF GP RATE OF 4% ON SUCH SUPPRESSED PRODUCTION AND THIRD IS THE WORKING CAPITAL REQUIRED FOR INVESTMENT IN SUCH SUPPRESSED PRODUCTION. WE FIND THAT SIMILAR ISSUE OF ADDITION ON ACCOUNT SUPPRESSED PRODUCTION ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY AROSE BEFORE THE TRIBUNAL IN THE CASE OF SRJ PEETY STEEL PVT. LTD. (SUPRA). TH OUGH BOTH THE PARTIES HAVE RAISED THEIR ARGUMENTS IN FAVOUR OF/AGAINST THE ORDER OF THE TRIBUNAL IN SRJ PEETY STEEL PVT. LTD. (SUPRA), WE FIRST REFER TO THE DECISION OF THE TRIBUNAL AND THEN MEET WITH THE RESPECTIVE OBJECTIONS OF BOTH THE AUTHORIZED REPRES ENTATIVES. 55. WHILE ARGUING THE APPEALS IN THE LEAD CASE OF SHREE OM ROLLING MILLS PVT. LTD. ON 05.05.2015, THE LD. SPECIAL AR FILED WRITTEN NOTE AND MADE ELABORATE SUBMISSIONS AND TOOK US THROUGH THE PAGE TO PAGE OF NOTE AND ALSO RELIED ON SERIES OF CASE LAWS. HE CONTINUED HIS ARGUMENTS IN THE PRE - LUNCH HOUR ON 07.05.2015. ON THE PERUSAL OF THE WRITTEN NOTE FILED BY THE LD. SPECIAL AR AND ON COMPARISON OF THE SAID WRITTEN NOTE WITH THE WRITTEN NOTE DATED 05.11.2014 FILED BY HIM BEFORE THE TRIBUNAL IN THE CASE OF M/S. SRJ PEETY STEELS PVT. LTD., (SUPRA) WHICH IS A SISTER CONCERN OF SHREE OM ROLLING MILLS PVT. LTD., WE FIND THAT THE SAME ARE IDENTICAL. WE CALLED FOR APPEAL FOLDER OF M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) AND FOUND THAT THE ARGUMENTS RAISED BY THE LD. SPECIAL AR IN THE CASE OF THE PRESENT ASSESSEE BEFORE US WERE REPEATED BY THE LD. SPECIAL AR. THOUGH THE CASE OF THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT THE ISSUE RAISED IN THE PRESENT APPEAL WAS IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA). HOWEVER, THE LD. SPECIAL AR STRESSED THAT THE ISSUE WAS AT VARIANCE AND MADE ELABORATE SUBMISSIONS. IT MAY BE PUT ON RECORD THAT M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) IS A CASE OF F URNACE, WHICH IS ENGAGED IN THE MANUFACTURE OF INGOTS / BILLETS, WHEREAS MANUFACTURING OF TMT BARS IS CARRIED OUT BY SHREE OM ROLLING MILLS PVT. LTD. BY USING INGOTS / BILLETS. IN THE CASE OF M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA), THERE WAS AN ORDER OF CENTRAL EXCISE COMMISSIONER, AURANGABAD IN RELATION TO SUPPRESSION OF PRODUCTION ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY. THE ASSESSEE FILED AN APPEAL AGAINST THE SAID ORDER OF CCE, 24 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) AURANGABAD BEFORE THE CESTAT AND THE THIRD MEMBER OF CESTAT DELE TED THE ADDITION MADE IN THE HANDS OF RESPECTIVE FURNACE CASES. HOWEVER, IN THE CASE OF THE ASSESSEE BEFORE US, THERE IS NO ORDER OF CCE, AURANGABAD AND THERE IS NO ORDER OF CESTAT. IN SOME OF THE YEARS, THE OWNERS OF ROLLING MILLS ON THE BASIS OF CERTAI N INFORMATION GATHERED BY THE DGCEI HAD MOVED A PETITION BEFORE THE SETTLEMENT COMMISSION AND OFFERED ADDITIONAL INCOME, WHICH WAS ACCEPTED BY THE SETTLEMENT COMMISSION IN ENTIRETY. IN SOME CASES, SUCH OFFER OF ADDITIONAL INCOME WAS BEFORE THE EXCISE AUTH ORITIES, WHO IN TURN, ACCEPTED THE SAME. THE ASSESSING OFFICER IN THE CASE OF ROLLING MILLS I.E. IN THE HANDS OF THE ASSESSEE BEFORE US WAS OF THE VIEW THAT BECAUSE OF ERRATIC CONSUMPTION OF ELECTRICITY, IN TURN, RELYING ON THE DATA OF CONSUMPTION OF ELEC TRICITY AS PER US STANDARDS, CAME TO THE CONCLUSION THAT THERE WAS SUPPRESSION OF PRODUCTION BY THE TMT BARS MANUFACTURERS IN JALNA CLUSTER ON THE GROUND OF VARIANCE IN CONSUMPTION OF ELECTRICITY VERSUS PRODUCTION. THE ASSESSING OFFICER ALSO REFERRED TO T HE DATA COLLECTED IN THE CASES OF FURNACE OWNERS I.E. M/S. SRJ PEETY STEELS PVT. LTD. AND OTHERS AND RELYING ON THE ADDITION MADE IN THE HANDS OF M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA), IN TURN, ON THE BASIS OF THE ORDER OF CCE, AURANGABAD, MADE ADDITIONS IN THE HANDS OF PRESENT SET OF ASSESSES BEFORE US. 56. THE TRIBUNAL HAD ELABORATELY CONSIDERED ALL THE ASPECTS OF ADDITION IN THE HANDS OF THE FURNACE OWNERS I.E. M/S. SRJ PEETY STEELS PVT. LTD., ON THE BASIS OF ERRATIC CONSUMPTION OF ELECTRICITY, WHICH IN TURN, WAS THE BASIS FOR MAKING THE ADDITIONS IN THE HANDS OF THE ASSESSEE THEREIN BY CCE, AURANGABAD AND VIDE ORDER DATED 16.01.2015 HELD THAT SINCE THE ORDER OF THE CCE, AURANGABAD HAS BEEN OVERRULED BY THE THIRD MEMBER OF CESTAT, THERE WAS NO BASIS FO R ADDITION IN THE HANDS OF THE ASSESSEE. THE OTHER ASPECTS OF THE ISSUE THAT THE ASSESSEE THEREIN HAD MADE THE PETITION BEFORE SETTLEMENT COMMISSION IN RESPECT OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, WAS ALSO CONSIDERED BY THE T RIBUNAL AND IN THE ABSENCE OF ANY INQUIRY / INVESTIGATION OR MATERIAL COLLECTED BY THE ASSESSING OFFICER, THE TRIBUNAL HELD THAT THERE WAS NO MERIT IN ANY ADDITION IN THE HANDS OF THE ASSESSEE IN ASSESSMENT YEAR 2007 - 08. FURTHER, IN ASSESSMENT THE HANDS OF THE ASSESSEE IN ASSESSMENT YEAR 2007 - 08. FURTHER, IN ASSESSMENT YEAR 2008 - 0 9, THERE WAS NO ADMISSION OF ANY CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY BEFORE THE SETTLEMENT COMMISSION AND IN THE ABSENCE OF ANY OTHER INQUIRY OR INVESTIGATION BEING CARRIED OUT BY THE ASSESSING OFFICER OR ANY OTHER EVIDENCE BEING BROUGHT ON RECORD, THE TRIBUNAL HELD THAT NO ADDITION IS WARRANTED IN THE HANDS OF THE ASSESSEE. THE ISSUE BEFORE THE TRIBUNAL IN M/S. SRJ PEETY STEELS PVT. LTD. WAS SUMMARIZED UNDER PARA 9, WHICH READS AS UNDER: - 9. AT THIS STAGE WE ARE NOT CONSIDERIN G THE APPEALS FILED BY THE REVENUE FOR THE REASON THAT THOSE APPEALS ARE AGAINST THE FINDING OF THE LD. CIT(A) THAT THE ENTIRE VALUE OF ALLEGED SUPPRESSED PRODUCTION/SALES OF INGOTS AND BILLETS CANNOT BE TREATED AS INCOME OF THE ASSESSEE AND SOME REASONABL E PERCENTAGE OF THE GROSS PROFIT IS TO BE ESTIMATED. LD. CIT(A), ACCORDINGLY, DIRECTED THE ASSESSING OFFICER TO ADOPT GROSS PROFIT @ 4% ON THE VALUE OF ALLEGED SUPPRESSED PRODUCTION/SALES AND ACCORDINGLY, PARTLY SUSTAINED THE ADDITIONS. NOW, WE FIRST DECI DE THE CORE ISSUE IN THIS CASE (I) ON THE FACTS AND CIRCUMSTANCES OF THIS CASE WHETHER THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE ADDITION OF RS.39,20,36,546/ - IN THE A.Y. 2007 - 08 AND RS.40,75,72,486/ - IN THE A.Y. 2008 - 09 ON ALLEGED SUPPRESSION OF PRODUCTION/SALES AND; (II) WHETHER THE ASSESSING OFFICER WAS JUSTIFIED IN HOLDING THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE DOES NOT GIVE THE CORRECT PICTURE OF THE STATE OF AFFAIRS AND HENCE, THOSE BOOKS OF ACCOUNT NEEDS TO BE REJECTED. 57. AFTER CO NSIDERING THE SUBMISSIONS OF THE ASSESSEE IN PARAS 10 TO 10.5 AT PAGES 12 TO 16 AND ALSO SUMMARIZING THE SUBMISSIONS OF THE LD. SPECIAL AR IN PARAS 11 TO 11.6 AT PAGES 16 TO 22 AND THE REJOINDER OF THE ASSESSEE IN PARAS 12 TO 12.1 AT PAGES 22 TO 24 OF THE ORDER, THE TRIBUNAL OBSERVED AS UNDER: - 25 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 13. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. LD. AR FOR THE ASSESSEE FILED ARGUMENT SYNOPSIS AND LD. SPL. AR FOR THE REVENUE ALSO HAS FILED NOTES OF HIS ARGUMENT ON 05 - 11 - 2014 WHI CH ARE PLACED ON RECORD. WE HAVE ALSO CONSIDERED ALL THE PRECEDENTS AND DECISIONS RELIED ON BY BOTH THE PARTIES. THE ASSESSEE IS MANUFACTURER OF INGOTS/BILLETS. SO FAR AS A.Y. 2007 - 08 IS CONCERNED THE ORIGINAL ASSESSMENT OF THE ASSESSEE WAS COMPLETED U/ S. 143(3) OF THE ACT ON 31 - 12 - 2009. WHILE COMPLETING THE ASSESSMENT U/S. 143(3) OF THE ACT, IN THE OPINION OF THE ASSESSING OFFICER THE ELECTRICITY CONSUMPTION SHOWN BY THE ASSESSEE WAS AT HIGHER SIDE AS COMPARED TO THE QUANTUM OF PRODUCTION DECLARED BY T HE ASSESSEE. THE ASSESSING OFFICER, THEREFORE, MADE THE ADDITION ON THE BASIS OF THE ALLEGED SUPPRESSION OF THE PRODUCTION/SALES BY THE ASSESSEE AS IN HIS OPINION THE ASSESSEE SHOULD HAVE DECLARED OR SHOWN MORE PRODUCTION OF THE INGOT/BILLETS. SUBSEQUENT LY, ON THE BASIS OF THE INFORMATION RECEIVED FROM THE OFFICE OF THE CCE, AURANGABAD VIDE THEIR LETTER DATED 29 - 03 - 2010 AS WELL AS ADJUDICATION ORDER OF CCE QUANTIFYING THE VALUE OF ALLEGED SUPPRESSED PRODUCTION AND ALLEGED EVASION OF EXCISE DUTY, THE ASSE SSING OFFICER INITIATED THE RE - ASSESSMENT PROCEEDINGS FOR A.Y. 2007 - 08 AGAINST THE ASSESSEE COMPANY U/S. 147 OF THE ACT. IN REASONS RECORDED BY THE ASSESSING OFFICER WHILE ISSUING THE NOTICE TO THE ASSESSEE COMPANY U/S. 147 FOR A.Y. 2007 - 08 THE ASSESSING OFFICER GAVE REFERENCE OF THE COMMUNICATION AND ORDER OF THE CCE AURANGABAD RECEIVED FROM THE CENTRAL EXCISE OFFICE AT AURANGABAD. 14. THE ASSESSING OFFICER HAS ALSO REFERRED TO ONE MATTER IN RESPECT OF THE ACTION CONDUCTED BY DGCE (INTELLIGENCE) AGAINS T THE FEW BROKERS AND SUB - BROKERS WHO WERE INVOLVED IN THE TRADING INTO THE INGOT/BILLETS AND TMT BARS. THE ASSESSING OFFICER ALSO REFERRED TO THE PETITION FILED BY THE ASSESSEE BEFORE THE CENTRAL EXCISE AND CUSTOM SETTLEMENT COMMISSION, MUMBAI BENCH, MUM BAI FOR WAIVER OF PENALTY, INTEREST AND FOR GETTING MUMBAI BENCH, MUM BAI FOR WAIVER OF PENALTY, INTEREST AND FOR GETTING IMMUNITY FROM A PROSECUTION. THE ASSESSING OFFICER PROCEEDED TO DECIDE THE ALLEGED SUPPRESSION OF PRODUCTION BY THE ASSESSEE ADMITTEDLY WHICH WAS BASED ON THE INFORMATION RECEIVED FROM CENTRAL EXCISE AUT HORITY AS WELL AS THE ADJUDICATION ORDER OF THE CCE, AURANGABAD. IT IS PERTINENT TO NOTE HERE THAT IN THIS CASE THAT THERE WAS A SEARCH AND SEIZURE ACTION AGAINST THE ASSESSEE AND ITS GROUP COMPANIES BY THE INCOME - TAX DEPT. ON 17 - 03 - 2006 AND IN CONSEQUENC E OF THE SEARCH AND SEIZURE ACTION U/S. 132(1) THE ASSESSMENTS OF THE ASSESSEE HAVE BEEN FRAMED U/S. 153A R.W.S. 143(3) FOR THE A.YS. 2000 - 01 TO 2006 - 07. IT IS ALSO PERTINENT TO NOTE THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION NO INCRIMINATING EVIDENCE WAS FOUND SUGGESTING THAT THE ASSESSEE HAS SUPPRESSED THE PRODUCTION AS COMPARED TO THE CONSUMPTION OF THE ELECTRICITY. NO EXCESS STOCK OF FINISHED GOODS WAS ALSO FOUND. WE ALSO PUT ON RECORD THAT THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER I N CONSEQUENCE OF SEARCH AND SEIZURE ACTION AGAINST THE ASSESSEE U/S. 153A R.W.S. 143(3) HAVE REACHED THE HON'BLE JURISDICTIONAL HIGH COURT. WE WILL LATER REFER TO THE DECISION OF THE TRIBUNAL AS WELL AS HON'BLE HIGH COURT AND CERTAIN IMPORTANT OBSERVATION S MADE IN RESPECT OF THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER. IT IS ALSO TO BE TAKEN NOTE THAT THE A.YS. 2007 - 08 AND 2008 - 09 BEFORE US ARE IMMEDIATELY NEXT ASSESSMENT YEARS AFTER THE ASSESSMENTS IN CONSEQUENCE OF SEARCH AND SEIZURE ACTION U/S. 132( 1) OF THE ACT WERE COMPLETED. 15. IT IS ALSO TO BE TAKEN NOTE OF THE FACT THAT EVEN FOR THE A.YS. 2007 - 08 AND 2008 - 09, NO INDEPENDENT INVESTIGATION OR ANY ENQUIRY IS MADE BY THE ASSESSING OFFICER OR ANY OTHER INCOME TAX AUTHORITIES. IN THE ASSESSMENT O RDER THE ASSESSING OFFICER HAS PLACED HIS RELIANCE ONLY ON THE INFORMATION RECEIVED FROM THE CENTRAL EXCISE AUTHORITIES AND THE PROCEEDING BEFORE THE SETTLEMENT COMMISSION OF CENTRAL EXCISE & CUSTOM, MUMBAI. THE INVESTIGATION WAS CARRIED OUT BY CENTRAL EX CISE AUTHORITIES I.E. DGCEI, AGAINST FEW BROKERS/SUB - BROKERS AND THOSE BROKERS GAVE THE NAMES OF MANY 26 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) COMPANIES WHO ARE IN THE MANUFACTURING OF INGOT/BILLETS AND TMT BARS. AS PER THE STATEMENT GIVEN BEFORE THE CENTRAL EXCISE AUTHORITIES BY THOSE BROKERS A S WELL AS SUB - BROKERS NAMELY SHRI UMESH MODI, MUMBAI, SHRI ANIL D LINGADE, SHRI MUKESH GUPTA IT WAS ADMITTED THAT THEY WERE INVOLVED IN CLEARING THE CONSIGNMENTS FROM THE FACTORY ON WEIGHMENT SLIPS ONLY AND NO EXCISE DUTY WAS PAID AND THEY WERE INVOLVED IN PROVIDING FAKE TRADING BILLS AND CHALLANS WHICH ACCOMPANIED THE VEHICLES CARRYING THOSE CONSIGNMENTS. AS PER THE MODUS OPERANDI ADOPTED BY THE BROKERS THEY USED TO RECOVER THE SAID FAKE TRADING BILLS AND CHALLANS AFTER THE GOODS REACHED THEIR DESTINATION . AS NOTED BY THE ASSESSING OFFICER THOSE BROKERS/SUB - BROKERS ALSO ADMITTED THAT THE ENTIRE EVIDENCE WAS DESTROYED BY THEM AND THEY USED TO GET THE COMMISSION OF RS.100/ - PER MT. THE ASSESSING OFFICER HAS DISCUSSED THE INFORMATION GATHERED BY THE DGCEI, ZONAL UNIT, MUMBAI IN PARA NOS. 2.1, 2.2, 2.3, 2.4, 2.5, 2.6 & 2.7 OF THE ASSESSMENT ORDER. SO FAR AS ACTION AGAINST THE BROKERS AND SUB - BROKERS ARE CONCERNED THE CENTRAL EXCISE AUTHORITY ISSUED SHOW CAUSE TO THE ASSESSEE AS WELL AS THE OTHER MANUFACTURER S WHO WERE INVOLVED IN CLEARING THE EXCISABLE GOODS WITHOUT PAYMENT OF DUTY. ALL THE MANUFACTURERS OF THE INGOTS/BILLETS AND TMT BARS WERE BASED IN JALNA AND THE ASSESSEE IS ONE OF THEM. AS PER THE INVESTIGATION DONE BY THE CENTRAL EXCISE AUTHORITIES, TH E ASSESSEE WHO IS MANUFACTURING OF INGOTS/BILLETS SUPPLIED 288.500 MT. TO SHRI OM ROLLING MILLS PVT. LTD. WHICH IS ENGAGED IN THE MANUFACTURING OF TMT BARS. THE ASSESSING OFFICER ALSO REFERRED TO A STATEMENT OF SHRI SURENDRA S. PEETY, MANAGING DIRECTOR OF THE ASSESSEE RECORDED ON 12 - 01 - 2007, BY THE DGCEI WHO ALLEGEDLY ADMITTED THAT THE GOODS SUPPLIED TO SHRI OM ROLLING MILLS PVT. LTD. I.E. INGOTS/ BILLETS, WERE REMOVED CLANDESTINELY WITHOUT PAYMENT OF EXCISE DUTY AND THE SAID MATERIAL WAS TO EXTENT OF 275 MTS. THE SALE PRICE WAS RECEIVED IN CASH FROM SHRI OM ROLLING MILLS PVT. LTD. AND HENCE, THERE WAS NO ACCOUNTING. THE ASSESSEE ADMITTED THE SAID CHARGE OF THE CENTRAL EXCISE AUTHORITIES I.E. DGCEI AND APPROACHED THE SETTLEMENT COMMISSION AND PAID THE EXC ISE DUTY TO THE EXTENT OF RS.7,79,313/ - FOR CLEARING THE GOODS AND PAID THE EXC ISE DUTY TO THE EXTENT OF RS.7,79,313/ - FOR CLEARING THE GOODS WITHOUT PAYMENT OF EXCISE DUTY. THE DECLARATION FILED BY THE ASSESSEE WAS ACCEPTED WITHOUT ANY FURTHER ADDITION OR OBJECTION FILED BY THE CENTRAL EXCISE AUTHORITIES. THE SETTLEMENT COMMISSION LEVIED THE PENALTY OF RS.8,000/ - . 16. THE ASSESSING OFFICER ALSO HAS IN DETAIL DISCUSSED THE PROCESS INVOLVED IN THE MANUFACTURING OF INGOTS AS WELL AS BILLETS IN THE ASSESSMENT ORDER. AT THIS STAGE WE ARE NOT CONCERNED WITH THE SAID DISCUSSION WHICH I S IN PARA NO. 4.1 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER IN HIS DISCUSSION FOR ARRIVING AT THE CONCLUSION THAT AS COMPARED TO THE CONSUMPTION OF THE ELECTRICITY SHOWN BY THE ASSESSEE THE PRODUCTION WAS MUCH MORE LOWER, HAS GIVEN THE EXAMPLES OR R EFERENCE OF SOME OTHER MANUFACTURERS AGAINST WHOM ACTION TAKEN BY THE CENTRAL EXCISE AUTHORITIES. AS OBSERVED BY THE ASSESSING OFFICER AS PER AN ARTICLE WRITTEN BY SHRI R.P. VARSHNEY, EXECUTIVE DIRECTOR, ALL INDIA INDUCTION FURNACES ASSOCIATION, NEW DELHI ON ELECTRIC STEEL MAKING TECHNOLOGY IN THE 21 ST CENTURY WHICH IS AVAILABLE ON THE INTERNET WHICH IS ON THE ELECTRIC INDUCTION FURNACE AND AS PER THE SAID ARTICLE THE POWER CONSUMPTION IN INDUCTION FURNACE IS BETWEEN 650 TO 820 UNITS PER MT DEPENDING UPO N THE INPUT CHARGE USED. THE ASSESSING OFFICER ALSO REFERRED TO THE TECHNICAL REPORT OF THE IIT, WHICH STATES THAT ELECTRICITY REQUIREMENT FOR MANUFACTURING 1 MT OF M.S. INGOTS WHERE MELTING SCRAP IS USED AS AN INPUT, VARIES FROM 555 TO 754 UNITS AND WHER E SPONGE IRON IS USED AS AN INPUT, THE ELECTRICITY REQUIREMENT VARIES FROM 815 TO 1046 UNITS. THE ASSESSING OFFICER, THEREFORE, CAME TO THE CONCLUSION THAT THE ASSESSMENT FRAMED BY THE COMMISSIONER OF CENTRAL EXCISE AND CUSTOM, AURANGABAD IN RESPECT OF THE ALLEGED SUPPRESSION OF PRODUCTION AFTER CONSIDERING THE ELECTRICITY CONSUMPTION DECLARED BY THE ASSESSEE AND THE PRODUCTION RATE OF UNITS OF ELECTRICITY PER METRIC TON ADOPTED BY THE CCE, AURANGABAD ARE VERY MUCH REASONABLE, FAIR AND JUSTIFIED AND HE A DOPTED THE SAME FOR THE PURPOSE OF CALCULATION OF ALLEGED 27 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) UNACCOUNTED PRODUCTION OF FINISHED GOODS (PARA NO. 4.3 OF THE ASSESSMENT ORDER). 17. THE ASSESSING OFFICER ALSO REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE U/S. 145(3) OF THE INCOME - TAX ACT BY GIVING THE REASON THAT THE ASSESSEE HAS NOT GIVEN THE TRUE AND CORRECT PICTURE. THE ASSESSING OFFICER ADOPTED THE SUPPRESSION OF PRODUCTION DETERMINED BY THE CCE, AURANGABAD AS PER HIS ADJUDICATION ORDER AND HELD THAT THE ASSESSEE HAS SUPPRESSED THE PRODU CTION AND ACCORDINGLY, WORKED THE SUPPRESSED PRODUCTION OF THE A.Y. 2007 - 08 AS UNDER: A.Y. SUPPRESSED PRODUCTION M.T. RATE PER M.T. RS. ASSESSABLE VALUE OF SUPPRESSED PRODUCTION RS. 2007 - 08 20,751 18,892 39,20,37,546 2008 - 09 29,276 21,444 40,75,72,486 18. IN THE A.Y. 2007 - 08, THE ASSESSING OFFICER GAVE THE SET OFF OF RS.8,44,01,504/ - WHICH WAS IN RESPECT OF THE ADDITION MADE BY THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT U/S. 143(3) OF THE ACT IN THE ORDER DATED 31 - 12 - 2008 AND MADE THE N ET ADDITION OF RS.30,76,35,042/ - . SO FAR AS A.Y. 2008 - 09 IS CONCERNED NO ADJUSTMENT WAS MADE IN THE A.Y. 2008 - 09 AS IT WAS THE REGULAR ASSESSMENT U/S. 143(3) OF THE ACT. EVEN THOUGH IN THE A.Y. 2008 - 09, THE ASSESSING OFFICER HAS OBSERVED THAT THE INFORMA TION RECEIVED FROM THE CENTRAL EXCISE AUTHORITY IS NOT RELEVANT, BUT FINALLY THE ASSESSMENT ORDER IS FRAMED ON THE BASIS OF THE ORDER PASSED BY THE COMMISSIONER OF CENTRAL EXCISE AND CUSTOM, AURANGABAD AS PER THE VALUE DETERMINED IN THE ADJUDICATION ORDER FOR THE PURPOSE OF LEVY OF EXCISE DUTY ADOPTING STATISTIC OF POWER CONSUMPTION. IN THE COMPUTATION FOR THE A.Y. 2008 - 09 THE ASSESSING OFFICER MADE THE MISTAKES BY MENTIONING RS. ( - ) 1,91,62,000/ - AS PER THE ORDER U/S. 143(3) WHEN IN FACT THE SAID FIGURE I S AS 1,91,62,000/ - AS PER THE ORDER U/S. 143(3) WHEN IN FACT THE SAID FIGURE I S AS PER THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THE A.Y. 2008 - 09. 58. AFTER ANALYZING THE SUBMISSIONS OF THE ASSESSEE, THE TRIBUNAL NOTED THAT IN BOTH THE YEARS BEFORE IT, THE ASSESSING OFFICER HAD DETERMINED THE ALLEGED SUPPRESSION OF PRODUCTIO N / SALES AS DETERMINED BY THE CCE, AURANGABAD ON THE BASIS OF ERRATIC CONSUMPTION OF ELECTRICITY. THE BASIS OF THE ORDER OF CCE, AURANGABAD WAS THE REPORT OF DR. N.K. BATRA, PROFESSOR OF IIT, KANPUR. THE THIRD MEMBER OF CESTAT IN GROUP OF CASES OF FURNA CE OWNERS HELD THAT THE ORDER OF CCE, AURANGABAD WAS NOT SUSTAINABLE AND HAD TO BE CANCELLED IN TURN, RELYING ON THE RATIO LAID DOWN IN R.A. CASTING (SUPRA). THE RELEVANT FINDING OF THE TRIBUNAL IN TURN, INCORPORATING THE ORDER OF THIRD MEMBER OF CESTAT I N PARAS 19 TO 19.4, WHICH READ AS UNDER: - 19. IN SUM AND SUBSTANCE IN BOTH THE ASSESSMENT YEARS THE ASSESSING OFFICER HAS DETERMINED ALLEGED SUPPRESSION OF THE PRODUCTION/SALES AS DETERMINED THE COMMISSIONER OF CENTRAL EXCISE AND CUSTOM, AURANGABAD ON THE BASIS OF POWER CONSUMPTION. THE COPY OF THE ADJUDICATION ORDER PASSED BY THE COMMISSIONER OF CENTRAL EXCISE AND CUSTOM AND SERVICE TAX, AURANGABAD DATED 28 - 08 - 2009 (IN SHORT REFERRED TO AS THE CCE) IN THE CASE OF THE ASSESSEE IS PLACED AT PAGE NOS. 122 TO 174 OF THE P/B - I. THE CCE, AURANGABAD HAS OBSERVED THAT DURING THE SCRUTINY OF ELECTRICITY BILLS, IT WAS NOTICED THAT THE SUBSTANTIAL AMOUNT OF EXPENDITURE HAS INCURRED BY THE ASSESSEE TOWARDS THE COST OF POWER CONSUMPTION (PRIMARY INPUT). HE HAS FURTHER OBSERVED THAT FROM THE SCRUTINY OF THE VARIOUS RECORDS, THE COST OF PRODUCTION IS MUCH MORE THAN COST OF SALE VALUE, LEAVING NO ROOM FOR OTHER MAJOR EXPENSES LIKE STORES, WAGES, SALARIES, COST OF MAINTENANCE ETC. THE LD. COMMISSIONER HAS REFERRED TO THE STUDY CONDUCTED BY THE INDIAN INSTITUTE OF TECHNOLOGY (IIT), KANPUR AND HAS OBSERVED THAT AS PER THE SAID 28 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) TECHNICAL OPINION REPORT THE CONSUMPTION OF ELECTRICITY FOR MANUFACTURE OF ONE METRIC TON OF STEEL INGOTS VARIES BETWEEN 555 TO 1026 ELECTRIC ITY UNITS DEPENDING UPON THE THERMAL EFFICIENCY, ELECTRICITY EFFICIENCY AND NATURE OF MIX OF RAW MATERIAL. AS OBSERVED BY THE LD. CCE IN THE CASE OF THE ASSESSEE AS PER THEIR ELECTRICITY BILLS, THE AVERAGE CONSUMPTION OF ELECTRICITY FOR MANUFACTURE OF 1 M T OF MS INGOTS VARIES FROM 1454 TO 1856 UNITS. 19.1 HE RELYING ON THE TECHNICAL REPORT OF IIT, KANPUR THE LD. COMMISSIONER OBSERVED THAT ON CALCULATING THE PRODUCTION OF M.S. INGOT/BILLETS ON THE BASIS OF CONSUMPTION OF 1026 UNITS (MAXIMUM LIMIT) OF ELE CTRICITY FOR PER MT OF MS INGOTS PRODUCED, IT IS NOTICED THAT THERE IS A HUGE DIFFERENCE IN THE ACTUAL/NORMAL PRODUCTION AND THE RECORDED FIGURES IN THE ASSESSEES RECORDS. THE LD. CCE ACCORDINGLY, OBSERVED THAT THE ASSESSEE HAS WILLFULLY SUPPRESSED THE F IGURES OF PRODUCTION OF BILLETS/MS INGOTS IN THEIR RECORDS WITH AN INTENT TO EVADE PAYMENT OF CENTRAL EXCISE DUTY AND, HAVE INVOLVED THEMSELVES IN THE CLANDESTINE REMOVAL OF FINAL PRODUCTS. HE ALSO REFERRED TO THE SHOW CAUSE NOTICE ISSUED BY THE DGCEI TO THE ASSESSEE WHICH MATTER WAS ULTIMATELY SETTLED BY THE ASSESSEE COMPANY IN THE SETTLEMENT COMMISSION. THE LD. COMMISSIONER ALSO REFERRED TO NON - MAINTENANCE OF THE PROPER ELECTRICITY CONSUMPTION RECORD MORE PARTICULARLY IN FORM G - 7. THE LD. COMMISSIONER ALSO GAVE THE DATA OF PRODUCTION FROM APRIL, 2003 TO MARCH, 2008 IN HIS ORDER. HE HAS ALSO RECORDED THE OBJECTIONS OF THE ASSESSEE COMPANY. IT APPEARS THAT THE ASSESSE DEMANDED THE CROSS EXAMINATION OF DR. N.K. BATRA, PROFESSOR OF IIT, KANPUR WHICH OPINIO N WAS HEAVILY RELIED ON BY THE CCE, AURANGABAD. THE LD. COMMISSIONER OBSERVED THAT THE SAID DR. N.K. BATRA WAS NO MORE AND HENCE, HIS CROSS EXAMINATION WAS NOT POSSIBLE. HE HAS ALSO DISCUSSED AND REFERRED TO THE DIFFERENT DECISIONS OF THE TRIBUNAL. THE LD. COMMISSIONER ALSO RELIED ON THE INVESTIGATION MADE BY THE DGCEI AND SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE AND HOW THE ASSESSEE APPROACHED THE SETTLEMENT COMMISSION AND ADMITTED THE EVASION AND PAID THE EXCISE DUTY AND OBTAINED IMMUNITY AND ADMITTED THE EVASION AND PAID THE EXCISE DUTY AND OBTAINED IMMUNITY FROM CRIMINAL PROCEEDINGS. THE LD. COMMISSIONER CONFIRMED THE DEMAND RAISED IN THE SHOW CAUSE NOTICE AND ALSO LEVIED THE PENALTY TO THE EXTENT OF RS.33,07,22,069/ - . 19.2 THE SAID ORDER OF THE LD. COMMISSIONER WAS CHALLENGED BEFORE THE CESTAT BY FILING THE APPEAL U/ S. 35B(A) OF THE CENTRAL EXCISE ACT, 1944. THERE WAS A DIFFERENCE OF THE OPINION BETWEEN THE LD. MEMBERS OF THE CESTAT, I.E. LD. VICE - PRESIDENT AND LD. TECHNICAL MEMBER AND THE MATTER WAS REFERRED TO THE LD. THIRD MEMBER TO RESOLVE THE FOLLOWING DIFFERENC ES: A . WHETHER IN VIEW OF THE DISCUSSION IN PARA 1 TO 31 AND IN VIEW OF THE DECISION OF THE TRIBUNAL IN THE CASE OF R.A. CASTINGS PVT. LTD. (SUPRA) THE IMPUGNED ORDERS ARE TO BE SET ASIDE AND THE APPEAL ALLOWED. B . WHETHER IN VIEW OF THE DISCUSSION IN PARA 32 TO 68 ABOVE AND IN VIEW OF THE HON'BLE SUPREME COURTS JUDGMENT IN THE CASE OF TRIVENI RUBBER & PLASTICS (SUPRA) AND THIS TRIBUNALS DECISION IN THE CASE OF RATTAN STEELS WORKS (SUPRA), NAGPAL STEEL (SUPRA) AND HANS CASTINGS PVT. LTD. (SUPRA), THE IMPUGNE D ORDER ARE TO BE UPHELD AND ALL THE APPEALS DISMISSED. 19.3 THE LD. THIRD MEMBER OF THE CESTAT CONCURRED WITH THE FINDING OF THE HON'BLE VICE - PRESIDENT THAT THE ORDER PASSED BY LD. COMMISSIONER OF CENTRAL EXCISE AND CUSTOM, AURANGABAD WAS NOT SU STAINABLE AND HAS TO BE CANCELLED. THE OPERATIVE PART OF THE ORDER OF THE THIRD MEMBER IS AS UNDER: 20. IT IS ALSO SEEN THAT THE HON'BLE VICE PRESIDENT CORRECTLY OPINED THAT THE JUDGMENT IN R.A. CASTING (SUPRA) IS SQUARELY APPLICABLE IN THE FACTS OF THE INSTANT APPEALS. IN R.A, CASTING THE ELECTRICITY 29 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) CONSUMPTION WAS 2072 TO 2443 UNITS PER MT, WHICH IS HIGHER THAN THE AVERAGE ELECTRICITY CONSUMPTION IN THE INSTANT APPEALS. 20.1 THE COMMISSIONER IN THE ORDERS IMPUGNED IN THE INSTANT APPEALS WAS HAVING THE FOLLOWING REPORTS AND CLARIFICATIONS FOR HIS CONSIDERATION - (I). 555 TO 1046 UNITS PMT AS PER DR. BATRA'S REPORT; (II). 1800 UNITS PMT AS PER THE REPORT BY JOINT PLANT COMMITTEE CONSTITUTED BY THE MINISTRY OF STEEL, GOVERNMENT OF INDIA; (III). 1427 UNITS P ER MT AS PER THE REPORT OF NISST, MANDI, GOBINDGARH GIVEN IN JUNE - JULY, 2006; (IV). 650 TO 820 UNITS/MT AS PER ARTICLE OF THE EXECUTIVE DIRECTOR, ALL INDIA INDUCTION FURNACE ASSOCIATION, NEW DELHI (MR. VARSHNEY); (V). 1000 TO 1800 UNITS PER TON OR EVEN HI GHER, AS PER LETTERS DATED 18.3.2008 AND 25.4.2008 OF SAME MR. R.P. VARSHNEY [ALL INDIA INDUCTION FURNACES ASSOCIATION] INFORMING THAT HIS ARTICLE PREPARED IN 1989 - 90 WAS FOR CONCAST STEEL MAKING [THUS NOT FOR INDUCTION FURNACE], (VI). 620 TO 690 UNITS/M T AS PER LETTER DATED 22,6.2008 FROM ELECTROTHERM, (VII). LETTER DATED 9.8.2008 OF ELECTROTHERM TO A CLIENT SUGGESTING REASONS WHICH LEAD TO HIGH POWER - CONSUMPTION, AND ANOTHER LETTER DATED 5.4.2008 OF ELECTROTHERM AGREEING - ., WITH .THE LETTER DATED 5.4.2008 OF ELECTROTHERM AGREEING - ., WITH .THE VIEWS OF INDUCTION FURNACE 'ASSOCIATION AND INFORMING THAT IT IS VERY DIFFICULT TO DEFINE ANY RANGE OF POWER CONSUMPTION. 20.2 AS AGAINST THIS, IN PARA 20 OF THE ORDER, THE TRIBUNAL IN R.A. CASTING (SUPRA) CONSIDERED DIFFERENT ELECTRICITY CONSUMPTION FIGURES FOR PRODUCTION OF 1 MT OF MS INGOTS, REPORTED IN FOLLOWING DIFFERENT REPORTS - (I). 555 TO 1046 (KWH/T) AS PER DR. BATRA'S REPORT; (II). 1800 KWH/T AS PER THE REPORT BY JOINT PLANT COMMITTEE CONSTITUTED BY THE MINISTRY OF STEEL, GOVERNMENT OF INDIA; (III). 1427 KWH/T AS P ER THE REPORT OF NISST, MANDI, GOBINDGARH GIVEN IN JUNE - JULY, 2006; (IV). 650 UNITS TO 820 UNITS/MT AS PER THE EXECUTIVE DIRECTOR, ALL INDIA INDUCTION FURNACE ASSOCIATION, NEW DELHI (MR. VARSHNEY); (V). 851 UNITS/MT IN THE CASE OF NAGPAL STEEL V. CCE, CHAN DIGARH REPORTED IN 2000 (125) E.LT. 1147, 20.3 AFTER PERUSAL OF THESE REPORTS, TRIBUNAL OPINED THAT WIDE VARIATIONS IN THE CONSUMPTION ELECTRICITY HAVE BEEN REPORTED FOR THE MANUFACTURE OF ONE MT OF STEEL INGOT&, AND THAT THIS RENDERS THE NORM OF 1046 UNIT S ADOPTED BY THE REVENUE AS ARBITRARY. AFTER THIS FINDING, WHICH IS UPHELD BY THE HON'BLE ALLAHABAD HIGH COURT AND 30 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) EVEN SLP HAS BEEN DISMISSED, THERE WAS NO REASON FOR THE COMMISSIONER IN THE INSTANT CASES TO CONSIDER THE NORM OF 1026 UNITS ALLEGEDLY AS PE R REPORT OF DR. BATRA, FOR ARRIVING AT DEEMED PRODUCTION. MOREOVER, THE TRIAL RUN CONDUCTED BY THE DEPARTMENT HAD PROVED THAT AT THAT TIME POWER CONSUMPTION WAS ACTUALLY HIGHER THAN THAT REPORTED IN DR. BATRA'S REPORT. 20.4 IT IS ALSO SEEN THAT THE ALLEGAT IONS LEVELLED IN R,A, CASTING (SUPRA) WERE MAINLY - (I). INORDINATELY HIGH ELECTRICITY CONSUMPTION WITHOUT ANY EXPLANATION, (II). SALE OF INGOTS AT A HUGE LOSS OVER LAST 4 - 5 YEARS, WHICH WAS ECONOMICALLY AND COMMERCIALLY NOT POSSIBLE, (III). GENERATION OF F ICTITIOUS PROFITS IN THE BALANCE SHEETS BY DEPOSITING HUGE AMOUNT OF CASH WITH THE STOCK BROKERS AND RECEIVING CHEQUES OF PROFITS AGAINST THE CASH SO DEPOSITED, (IV). CLAIM OF HIGH AUXILIARY LOAD OF ABOUT 35%, HOWEVER THE TRIBUNAL IN CATEGORICAL TERMS HELD THAT NO DEMAND CAN BE UPHELD BASED ON ELECTRICITY CONSUMPTION AS SUCH BECAUSE THE CLANDESTINE MANUFACTURE AND REMOVAL OF EXCISABLE GOODS IS TO BE PROVED BY TANGIBLE, DIRECT, AFFIRMATIVE AND INCONTROVERTIBLE EVIDENCES RELATING TO - (I). RECEIPT OF RAW MATER IAL INSIDE THE FACTORY PREMISES, AND NON - ACCOUNTING THEREOF IN THE STATUTORY RECORDS; (II). UTILIZATION OF SUCH RAW MATERIAL FOR CLANDESTINE MANUFACTURE OF FINISHED GOODS; (III). MANUFACTURE OF FINISHED GOODS WITH REFERENCE TO INSTALLED CAPACITY, CONSUMPTI ON OF ELECTRICITY, LABOUR EMPLOYED AND PAYMENT MADE TO THEM, PACKING MATERIAL USED, RECORDS OF SECURITY OFFICERS, .DISCREPANCY IN THE STOCK OF RAW MATERIALS AND FINAL PRODUCTS; (IV). CLANDESTINE REMOVAL OF GOODS WITH REFERENCE TO ENTRY OF VEHICLE/TRUCK I N THE FACTORY PREMISES, LOADING OF GOODS THEREIN, SECURITY GATE RECORDS, TRANSPORTERS' DOCUMENTS, SUCH AS L.RS, STATEMENTS OF LORRY DRIVERS, ENTRIES AT DIFFERENT CHECK POSTS, FORMS OF THE COMMERCIAL TAX DEPARTMENT AND THE RECEIPT BY THE CONSIGNEES; (V). AM OUNT RECEIVED FROM THE CONSIGNEES, STATEMENT OF THE CONSIGNEES, RECEIPTS OF SALE PROCEEDS BY THE CONSIGNOR AND ITS DISPOSAL, 20.5 HOWEVER, SINCE NO SUCH EVIDENCES WERE BROUGHT ON RECORD, THE APPEAL OF R.A. CASTING WAS ALLOWED FOR WANT OF EVIDENCE RELATING TO THE ABOVE POINTS, WITH FURTHER FINDING THAT THE REVENUE, NOT HAVING CONDUCTED ANY EXPERIMENT WHATSOEVER, CANNOT BE PERMITTED TO JUSTIFY THE DEMANDS .RAISED. SIMILAR IS THE FACT SITUATION IN THE INSTANT APPEALS, 20.5 THE EVIDENCE AS PER REVENUE IN THE IN STANT APPEALS ARE - 31 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) A). HIGH ELECTRICITY CONSUMPTION WITHOUT ANY EXPLANATION, B). SALE OF INGOTS AT LOSS, WHICH WAS ECONOMICALLY AND COMMERCIALLY NOT POSSIBLE, C). DISCREPANCIES IN FINANCIAL ACCOUNTS IN SOME CASES AND/OR ANY PROCEEDINGS UNDER INCOME TAX, D) . CLAIM OF HIGHER AUXILIARY LOAD, E). PAST CASE SETTLED BEFORE SETTLEMENT COMMISSION, 20.7 SO FAR AS THE PROCEEDINGS ALREADY SETTLED ARE CONCERNED, THE COMMISSIONER IS HOT RELYING ON THE SAME AND THE FINDINGS OF THE COMMISSIONER, AS RECORDED EARLIER, HAVE NOT BEEN CHALLENGED BY THE REVENUE. ALL THESE OTHER ALLEGATIONS WERE ALSO LEVELLED IN R.A. CASTING (SUPRA). IT WAS FURTHER OBSERVED IN R.A, CASTING (SUPRA) THAT IT WOULD BE APPROPRIATE ON THE PART OF THE REVENUE TO CONDUCT EXPERIMENTS IN THE FACTORY OF THE APPELLANTS AND OTHERS AND THAT TOO ON DIFFERENT DATES TO ADOPT - THE TEST RESULTS AS THE BASIS TO ARRIVE AT A NORM, WHICH CAN BE ADOPTED FOR FUTURE. IT WAS FURTHER HELD THAT - '23. THE TRIBUNAL HAS CONSISTENTLY TAKEN THE VIEW THAT WHEREVER ELECTRICITY CONSU MPTION ALONE IS ADOPTED AS THE BASIS TO RAISE DEMANDS, THE ORDER OF THE LOWER AUTHORITIES HAVE BEEN HELD TO BE UNSUSTAINABLE IN LAW AND SET ASIDE* AND THE REVENUE HAD BEEN DIRECTED TO CARRY OUT EXPERIMENTS IN DIFFERENT FACTORIES ON DIFFERENT DATES TO ARRIV E AT THE AVERAGE TO BE ADOPTED AS A NORM, WHICH CAN BE FOLLOWED THEREAFTER AND BE ADOPTED AS A NORM, WHICH CAN BE FOLLOWED THEREAFTER AND THE REVENUE IN THE PRESENT CASE NOT HAVING CONDUCTED ANY EXPERIMENT WHATSOEVER CANNOT BE PERMITTED TO JUSTIFY THE DEMANDS RAISED. IT WILL BE APPROPRIATE ON THE PART OF THE REVEN UE TO CONDUCT EXPERIMENTS IN THE FACTORY OF THE APPELLANTS AND OTHERS AND THAT TOO ON DIFFERENT DATES TO ADOPT THE TEST RESULTS AS THE BASIS TO ARRIVE AT A NORM, WHICH CAN BE ADOPTED FOR FUTURE. THE IMPUGNED DEMAND BASED MERELY ON ASSUMPTIONS AND PRESUMPTI ONS CANNOT, THEREFORE, BE SUSTAINED NOR COULD BE JUSTIFIED BOTH ON FACTS AND IN LAW. 24. THE LAW IS WELL SETTLED THAT IN EVERY CASE OF ALLEGED CLANDESTINE REMOVAL, THE ONUS IS ON THE REVENUE TO PROVE WHAT IT ALLEGES WITH POSITIVE AND CONCRETE EVIDENCE. IN THE ABSENCE OF ANY POSITIVE EVIDENCE BROUGHT BY THE REVENUE TO DISCHARGE ITS ONUS, THE IMPUGNED ORDER CANNOT BE SUSTAINED.' 20.8 IN THE PRESENT APPEALS, NONE OF THE SO CALLED OTHER EVIDENCES REFERRED IN THE IMPUGNED ORDERS PROVE CLANDESTINE CLEARANCE. THE PRIMARY EVIDENCE OF DEPARTMENT IS ADMITTEDLY EXCESS ELECTRICITY CONSUMPTION BASED ON BENCHMARK ADOPTED ALLEGEDLY - 'FROM REPORT OF DR. BATRA, WHICH WAS ALREADY HELD TO BE ARBITRARY BY HON'BLE TRIBUNAL IN RA CASTING (SUPRA). THUS, IN MY OPINION THE PRIMARY E VIDENCE RELIED IN THE IMPUGNED ORDER IS ITSELF INADMISSIBLE, AND NO OTHER EVIDENCE IN THE INSTANT CASE PROVES CLANDESTINE PRODUCTION AND CLEARANCE TO SUSTAIN, THE DEMAND, IT IS CONTENDED BY REVENUE THAT FURNACES INSTALLED IN THE FACTORY OF PRESENT APPELLAN TS WERE IN SOUND CONDITION AS COMPARED TO R.A. CASTING (SUPRA), HOWEVER I NEITHER COULD FIND ANY MATERIAL IN SUPPORT OF THIS ARGUMENT, NOR ANY 32 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) SUCH FINDING IN THE ORDERS IMPUGNED IN THE APPEALS. THE REVENUE SOUGHT TO RELY ON AN ORDER PASSED BY TRIBUNAL IN GUIABCHAND SILK MILLS PVT. LTD., V/S. CCE, HYDERABAD - II, 2005 (184) ELT 263, HOWEVER THE SAME WAS ALSO CONSIDERED IN R.A. CASTING (SUPRA). IT HAS BEEN CONTENTION OF THE DEPARTMENT THAT THE DEPARTMENT IS NOT REQUIRED TO PROVE ITS CASE TO ITS MATHEMATICAL P RECISION, BY RELYING ON JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF D. BHOORMULL - 1983 (13) ELT 1546 (SC), RELIED UPON BY THE COMMISSIONER AS WELL AS THE HON'BLE MEMBER (TECHNICAL). IT IS SEEN THAT EVEN THIS JUDGMENT WAS CONSIDERED IN R.A. CASTIN G (SUPRA), 21. THERE CAN BE NO DISPUTE ON THE FACT THAT IN ADJUDICATION PROCEEDINGS, THE CHARGE OF CLANDESTINE REMOVAL IS DEFINITELY TO BE ESTABLISHED ON THE BASIS OF PREPONDERANCE OF PROBABILITIES. HOWEVER, IT CANNOT BE MERELY ON THE BASIS OF PRESUMPTIONS AND ASSUMPTIONS, REGARDING THE CLAIM OF THE REVENUE THAT SUBSEQUENT TO PASSING OF IMPUGNED ORDERS THE POWER CONSUMPTION FOR MANUFACTURING ONE MT OF INGOTS HAS REDUCED IN FACTORIES OF ALL THE APPELLANTS, I AM OF THE VIEW THAT IT CANNOT BE - .A' BASIS TO SUST AIN THE FINDINGS IN THE IMPUGNED ORDERS BY ASSUMING THAT THERE COULD NOT BE ANY REASON FOR LOWER CONSUMPTION OF ELECTRICITY DURING THE SUBSEQUENT PERIOD. I ALSO AGREE WITH THE FINDING OF THE HON'BLE VICE PRESIDENT THAT IN. ANY EVENT, THIS ADDITIONAL MATERI AL IS ALSO ONLY OF POWER CONSUMPTION. 22. IN WRITTEN SUBMISSIONS OF REVENUE, IT HAS ALSO BEEN CONTENDED THAT REPORT OF JPC SUGGESTING ELECTRICITY CONSUMPTION UPTO 1800 ITS PMT WAS FOR ELECTRIC ARC FURNACE AND NOT INDUCTION - FURNACE. HOWEVER, THE APPELLANT HAS CONTENDED THAT PRODUCTIVITY IN. ELECTRIC ARC FURNACE IS HIGHER THAN INDUCTION FURNACE. IN ANY EVENT, IN ELECTRIC ARC FURNACE IS HIGHER THAN INDUCTION FURNACE. IN ANY EVENT, IN THE IMPUGNED ORDERS, THERE IS NO SUCH REASON TO DISCARD THE REPORT AND IN ANY EVENT THE LETTER OF MR. R.P. VARSHNEY SUGGESTING THAT ELECTRIC CONSUMP TION IN INDUCTION FURNACE CAN BE UPTO 1800 UNITS PER MT IS ALSO ON RECORD. SINCE, VARYING REPORTS ARE ON RECORD, THE RATIO OF R.A. CASTING (SURA) IS SQUARELY APPLICABLE. 23. REVENUE, ALSO RELIED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF M ELTON INDIA V/S. THE COMMISSIONER TRADE TAX, U.P, - 2007 - TIOL - 14 - SC - CT, THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF RAJMOTI INDUSTRIES V/S. JOINT COMMISSIONER OF INCOME TAX, 2014 - TIOL - 203 - HC - AHM - IT, AND AN UNREPORTED ORDER DTD. 28/9/2010 OF ANDHRA PRADESH SALES TAX TRIBUNAL (VISAKHAPATNAM BENCH) IN THE CASE OF VENKATA RAIMANA STONE CRUSHERS COMPANY V/S. STATE OF ANDHRA PRADESH. IN THE CASE OF MELTON INDIA (SUPRA), FOR THE NORM, OF POWER CONSUMPTION, ACTUAL ELECTRICITY CONSUMPTION OF THE AS SESSMENT YEAR 2000 - 01 WAS TAKEN AS 'NORM' AND THE SAME WAS APPLIED IN SUBSEQUENT ASSESSMENT YEARS 2001 - 02 AND 2002 - 03.THIS WAS FOLLOWED BY THE SALES TAX TRIBUNAL IN THE ORDER CITED BY REVENUE. IN THE CASE OF RAJMOTI INDUSTRIES, FACTS OF THE CASE ARE THAT F OR THE ASSESSMENT YEAR 2005 - 06, THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND MADE VARIOUS ADDITIONS, NOT ONLY FOR THE REASON OF UNEXPLAINED WIDE FLUCTUATIONS IN THE PRODUCTIVITY AS COMPARED TO THAT IN A.Y. 2004 - 05, BUT ALSO BECA USE THE ASSESSEE THEREIN HAD NOT RECORDED THE WORK - IN - PROGRESS IN THE BOOKS OF ACCOUNTS. I AM THEREFORE OF THE OPINION THAT THESE CASES, APART FROM BEING UNDER STATUTES OTHER THAN CENTRAL EXCISE ACT, DO NOT ANY MANNER HELP IN SUSTAINING THE FINDINGS RECORD ED IN THE IMPUGNED ORDER. IN NONE OF THESE CASES ANY THEORETICAL REPOT WAS RELIED FOR ARRIVING AT DEEMED PRODUCTION. 33 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 24. FURTHER, IN SARVANA ALLOYS STEELS PVT LTD, 2011 - (274) ELT 248 (TRI - BANG.) SIMILAR ORDER BASED ON POWER CONSUMPTION WAS HELD UNSUSTAI NABLE AND THE APPEAL WAS ALLOWED AFTER CONSIDERING INTER ALIA THE JUDGMENTS IN D. BHOORMULL (SUPAR), GULABCHAND SILK MILLS (SUPRA), AS ALSO HANS CASTING (SUPRA). IN A.K. ALLOYS, 2012 (275) E.L.T. 232 (TRI. - DEL.) THE TRIBUNAL FOLLOWED THE DECISION OF R.A. CASTING (SUPRA) AND ALLOWED THE APPEAL, AS THE DEMAND WAS BASED MAINLY ON THE EVIDENCE OF POWER CONSUMPTION WITHOUT ANY EVIDENCE OF CLANDESTINE REMOVAL. 25. I THEREFORE CONCUR WITH THE FINDINGS OF THE HON'BLE VICE PRESIDENT AND IN MY OPINION, THE JUDGM ENT IN R.A. CASTING (SUPRA) WOULD BE SQUARELY APPLICABLE IN THE FACTS OF THE INSTANT CASE IN ALL THE APPEALS. 19.4 THE COMMON ORDER WAS PASSED BY THE CESTAT ON 30 - 07 - 2006 AS PER THE MAJORITY OPINION ALLOWING THE APPEALS FILED BY THE ASSESSEE AND OTHER APP ELLANT COMPANIES. THE COPY OF THE MAJORITY ORDER IS PLACED AT PAGE NOS. 5 AND 6 OF THE P/B VI. IT IS PERTINENT TO NOTE HERE THAT THE LD. COMMISSIONER HAS ALSO CONSIDERED THE INVESTIGATION MADE BY THE DGCEI AGAINST SOME BROKERS AND IN CONSEQUENCE THE SH OW CAUSE NOTICES (SCN) WERE ISSUED TO THE ASSESSEE AND OTHER COMPANIES AND THE ASSESSEE AND OTHER COMPANIES CAME FORWARD BEFORE THE SETTLEMENT COMMISSION AND PAID THE EXCISE DUTY. HENCE, THE INVESTIGATION OF THE DGCEI MADE AGAINST THE BROKERS AND SUB - BROK ERS REFERRED BY THE ASSESSING OFFICER WAS ALSO BEFORE THE LD. COMMISSIONER, AURANGABAD. ON PERUSAL OF THE ASSESSMENT ORDERS IT IS CLEAR THAT BOTH THE ASSESSMENTS ARE MERELY BASED ON THE ALLEGED SUPPRESSION OF THE PRODUCTION BY ESTIMATING CERTAIN CONSUMPTI ON OF ELECTRICITY I.E. 1026 UNITS FOR MANUFACTURING OF 1 MT OF INGOTS AND BILLETS. MOREOVER, EVEN IF IN THE A.Y. 2008 - 09, THE ASSESSING OFFICER HAS OBSERVED MOREOVER, EVEN IF IN THE A.Y. 2008 - 09, THE ASSESSING OFFICER HAS OBSERVED THAT THE INFORMATION RECEIVED FROM THE CENTRAL EXCISE AUTHORITIES HAS NO BEARING IN THE SAID ORDER BUT ON THE PERUSAL OF THE SAID ORDER, IT IS SEEN THAT ENTIRE ORDER IS COPY OF ORDER PASSED FOR THE A.Y. 2007 - 08. AS VARY BASIS OF THE ASSESSMENT ORDER I.E. THE ORDER OF THE COMMISSIONER OF CENTRAL EXCISE (CCE), AURANGABAD HAS BEEN SET ASIDE AND CANCELLED BY THE CESTAT, IN OUR OPINION THE ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) APPROVING THE ESTIMATED ALLEGED SUPPRESSION OF THE PRODUCTION/SALES HAVE NO LEGAL LEGS TO STAND. 59. THE TRIBUNAL THEREAFTER, DEALT WI TH THE ARGUMENTS OF LD. SPECIAL AR THAT EVEN THE MINORITY DECISION OF LD. TECHNICAL MEMBER OF CESTAT WAS A LEGAL ORDER. THIS PLEA OF THE LD. SPECIAL AR WAS REJECTED BY THE TRIBUNAL IN VIEW OF THE DECISION OF THIRD MEMBER OF THE CESTAT. 60. ANOTHER OBJE CTION RAISED BY THE LD. SPECIAL AR WAS WITH REFERENCE TO THE ORDER OF SETTLEMENT COMMISSION PASSED IN THE CASE OF SET OF COMPANIES. THE TRIBUNAL NOTED THAT THE CCE, AURANGABAD IN ITS ORDER HAD TAKEN INTO CONSIDERATION THE SAID MATERIAL WHILE DETERMINING T HE VALUE OF ALLEGED SUPPRESSED PRODUCTION AND HAD MADE OBSERVATIONS VIDE PARA 19. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) WERE AS UNDER: - 20.1 THE LD. TECHNICAL MEMBER OF THE CESTAT. THE LD. SPL. AR FOR T HE REVENUE ALSO REFERRED TO THE ORDER OF THE SETTLEMENT COMMISSION, MUMBAI PASSED IN THE CASE OF THE ASSESSEE AND OTHER COMPANIES. IT IS TRUE THAT THE ASSESSEE APPROACHED THE SETTLEMENT COMMISSION WHEN ON THE BASIS OF INVESTIGATION MADE BY THE DGCEI AGAINS T SOME OF THE BROKERS AND SUB - BROKERS DEALING IN THE INGOTS/BILLETS AND TMT BARS SHOW CAUSE NOTICE 34 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) WAS ISSUED TO THE ASSESSEE COMPANY AND MATTER WAS SETTLED. LD. CCE, AURANGABAD IN HIS ORDER HAS TAKEN IN TO CONSIDERATION SAID MATTER WHILE DETERMINING THE VALUE OF THE ALLEGED SUPPRESSED PRODUCTION AND HAS OBSERVED AS UNDER: 19. THERE ARE OTHER INSTANCES OF CENTRAL EXCISE VIOLATIONS DETECTED BY OTHER AGENCIES WHERE THE ASSESSEE WAS FOUND TO BE INVOLVED. IN ONE INSTANCE THAT ASSESSEE HAD APPROACHED THE SETT LEMENT COMMISSION, ADMITTED THE EVASION OFFENCE OF AN IDENTICAL NATURE AND HAD OBTAINED IMMUNITY FROM CRIMINAL PROCEEDINGS. THE ASSESSEE HAS HOWEVER ARGUED THAT EACH CASE HAS TO BE TREATED AS A SEPARATE CASE BASED ON ITS OWN MERIT AND DEALT WITH ACCORDING LY. THE ARGUMENT OF THE ASSESSEE IS ACCEPTED. NO RELIANCE HAS BEEN PLACED ON EVIDENCE RELIED UPON IN CENTRAL EXCISE PROCEEDINGS. THE FINDINGS IN THIS CASE ARE BASED ONLY ON MATERIAL AND EVIDENCE THAT HAVE BEEN BROUGHT ON RECORD IN THE INSTANT CASE. 61. THE TRIBUNAL THEREAFTER, NOTED ANOTHER ASPECT OF THE ISSUE THAT NO INDEPENDENT INVESTIGATION WAS MADE BY THE REVENUE, BUT THE ENTIRE ASSESSMENT WAS FRAMED ON THE BASIS OF INFORMATION RECEIVED FROM THE CENTRAL EXCISE DEPARTMENT AS WELL AS THE ADJUDICATI ON ORDER PASSED BY THE CCE, AURANGABAD, WHICH IN TURN, HAD BEEN CANCELLED BY THE THIRD MEMBER OF CESTAT. THE TRIBUNAL THUS, HELD THAT THE FOUNDATION FOR ASSESSMENT DOES NOT EXIST. IT WAS ALSO NOTED BY THE TRIBUNAL IN PARA 21 THAT THE INVESTIGATION BY THE DGCEI AND PROCEEDINGS BEFORE THE SETTLEMENT COMMISSION WERE CONSIDERED BY THE CCE IN ITS ADJUDICATION ORDER, WHICH IN TURN, WAS THE SUBJECT MATTER OF CESTAT AND THE SAID ORDER HAS BEEN SET - ASIDE, HENCE, IT WAS NOT NECESSARY TO DEAL WITH THE DECISIONS RELI ED UPON BY THE LD. SPECIAL AR, WHICH ARE IN THE CONTEXT OF ADMISSION OF THE DIRECTOR IN THE COURSE OF INVESTIGATION MADE BY THE DGCEI. 62. THE SECOND ISSUE OF MAINTAINING OF FORM NO.G - 7 IN RESPECT OF ELECTRICITY 62. THE SECOND ISSUE OF MAINTAINING OF FORM NO.G - 7 IN RESPECT OF ELECTRICITY CONSUMPTION, WAS ALSO BEFORE THE CESTAT A ND THE TRIBUNAL OVERRULED THE ARGUMENTS OF THE LD. SPECIAL AR AND UPHELD THE ARGUMENTS OF LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE ORDER OF CESTAT HAD TO BE APPLIED. THE RELEVANT PARA OF THE TRIBUNAL ORDER READS AS UNDER: - 21. THOUG H THE LD. SPL. AR HAS REFERRED TO AND RELIED ON THE DIFFERENT JUDGMENTS OF THE HON'BLE SUPREME COURT MORE PARTICULARLY ON THE BINDING NATURE OF THE ADMISSION OF ANY PERSON - SEC. 17, SEC. 106 AND SEC. 115 OF THE INDIAN EVIDENCE ACT ETC. BUT THE FACT REMAIN S THAT IN THE CASE OF THE PRESENT ASSESSEE NO INDEPENDENT INVESTIGATION IS MADE BY THE REVENUE BUT THE ENTIRE ASSESSMENTS ARE FRAMED ON THE BASIS OF THE INFORMATION RECEIVED FROM THE CENTRAL EXCISE DEPARTMENT AS WELL AS THE ADJUDICATION ORDER PASSED BY THE LD. COMMISSIONER OF CENTRAL EXCISE, AURANGABAD. MOREOVER, AS OBSERVED ABOVE THE ADJUDICATION ORDER PASSED BY THE CCE, AURANGABAD HAS BEEN CANCELLED BY THE CESTAT, MUMBAI BY MAJORITY OPINION AND HENCE, FOUNDATION OF ASSESSMENTS FOR A. YRS. 2007 - 08 & 2008 - 0 9 DO NOT EXIST. THE LAW IS ALSO WELL SETTLED THAT WHEN THE ASSESSEE FILES AN APPEAL CHALLENGING AN ORDER OF THE LOWER AUTHORITY BEFORE THE HIGHER APPELLATE AUTHORITY THEN THE ENTIRE ORDER GETS MERGED WITH THE ORDER OF THE HIGHER APPELLATE FORUM WHICH IN T HE PRESENT CASE IS CESTAT. MOREOVER, INVESTIGATION BY DGCEI AND PROCEEDING BEFORE THE SETTLEMENT COMMISSION HAS ALSO BEEN CONSIDERED BY THE CCE, AURANGABAD IN HIS ADJUDICATION ORDER. THE SAID ORDER WAS SUBJECT MATTER BEFORE THE CESTAT AND SAID ORDER HAS BE EN SET ASIDE. HENCE, WE DO NOT CONSIDER IT NECESSARY TO DEAL WITH DECISIONS RELIED ON BY LD. SPL AR OF THE REVENUE WHICH ARE IN CONTEXT OF ADMISSION OF THE DIRECTOR OF THE ASSESSEE IN THE COURSE OF INVESTIGATION MADE BY DGCEI MORE PARTICULARLY UNDER THE I NDIAN EVIDENCE ACT AS THOSE DECISIONS ARE NOT RELEVANT NOW THOUGH GOOD FOR ACADEMIC DISCUSSION. SO FAR AS MAINTAINING OF FORM G - 7 IN RESPECT OF THE ELECTRICITY CONSUMPTION, THE SAID ISSUE WAS ALSO BEFORE THE CESTAT WHILE DECIDING THE FATE OF ORDER OF THE L D. CCE, AURANGABAD. LD. 35 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) AR VEHEMENTLY ARGUED TO POINT OUT HOW THE ORDER OF THE CESTAT, MUMBAI BENCH, MUMBAI IS NOT CORRECT. THE CESTAT IS A HIGHER APPELLATE FORUM UNDER THE CUSTOM ACT 1962 AND CENTRAL EXCISE ACT 1944 AND WE CANNOT SIT AS REVISIONARY AUTHOR ITY OR MAKE ANY OBSERVATION WHETHER THAT ORDER IS RIGHT OR WRONG. 63. THE TRIBUNAL HELD THAT CESTAT WAS AN APPELLATE FORUM UNDER THE CUSTOMS ACT, 1962 AND CENTRAL EXCISE ACT, 1954 AND THE TRIBUNAL (INCOME - TAX) COULD NOT ACT AS REVISIONARY AUTHORITY OR MAK E ANY OBSERVATION WHETHER THAT ORDER WAS RIGHT OR WRONG. 64. THE TRIBUNAL FURTHER REFERRED TO SEARCH AND SEIZURE OPERATIONS CARRIED OUT UNDER SECTION 132(1) OF THE ACT ON 17.03.2006 AGAINST M/S. SRJ PEETY STEELS PVT. LTD. AND THE ASSESSMENT FRAMED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT. THE ASSESSEE THEREIN I.E. M/S. SRJ PEETY STEELS PVT. LTD. HAD FILED AN APPEAL BEFORE THE TRIBUNAL AND THE ORDER OF THE TRIBUNAL IS REPORTED IN 137 TTJ (PUNE) 627. THE TRIBUNAL IN M/S. SRJ PEETY STEELS PVT. LTD. (SU PRA) REFERRED TO THE OBSERVATIONS OF TRIBUNAL IN EARLIER PROCEEDINGS RELATING TO ASSESSMENT YEARS 2000 - 01 TO 2006 - 07 UNDER SECTION 153A R.W.S 143(3) OF THE ACT AND HELD THAT IN THE SAID CASE OF SEARCH AND SEIZURE, IT WAS ALSO HELD THAT THE CONSUMPTION OF E LECTRICITY FOR THE MANUFACTURE OF MILD STEEL, INGOTS / BILLETS DEPENDING ON VARIOUS FACTORS AND THERE WAS NO JUSTIFICATION TO CHARGE THE ASSESSEE THAT IT HAD SUPPRESSED THE PRODUCTION AND INDULGED INTO UNACCOUNTED PRODUCTION. THE ORDER OF THE TRIBUNAL WAS CHALLENGED BY THE DEPARTMENT BEFORE THE HONBLE BOMBAY HIGH COURT AND THE REVENUES APPEAL WAS DISMISSED BY COMMON ORDER DATED 10.02.2014 IN THE CASE OF ASSESSEE AND OTHER COMPANIES BY THE HONBLE BOMBAY HIGH COURT AND THERE WERE OBSERVATIONS ON THE ESTIM ATION OF PRODUCTION BASED ON THE CONSUMPTION OF ELECTRICITY. THE TRIBUNAL WHILE DECIDING THE APPEAL OF M/S. SRJ PEETY STEELS PVT. LTD. IN THIS REGARD OBSERVED AS UNDER: - 22. WE HAVE ALREADY MENTIONED HERE - IN - ABOVE THAT IN THE CASE OF THE 22. WE HAVE ALREADY MENTIONED HERE - IN - ABOVE THAT IN THE CASE OF THE ASSESSE, THE SE ARCH AND SEIZURE OPERATION WAS CARRIED OUT U/S. 132(1) OF THE INCOME - TAX ACT ON 17 - 03 - 2006 AND ACCORDINGLY THE ASSESSMENT ORDERS FOR THE A.YS. 2000 - 01 TO 2006 - 07 WERE FRAMED U/S. 153A R.W.S. 143(3) OF THE ACT. THE ASSESSING OFFICER REJECTED THE BOOKS OF A CCOUNT OF THE ASSESSEE FOR THE A.YS. 2000 - 01 TO 2006 - 07 AND ONE OF THE REASONS WAS THAT ALLEGED SUPPRESSED PRODUCTION WHICH WAS COMPUTED ON THE BASIS OF CONSUMPTION OF THE ELECTRICITY. THE ASSESSING OFFICER DEVISED A FORMULA ON THE BASIS OF ELECTRICITY CO NSUMPTION AND THE SAME WAS APPLIED UNIFORMLY IN ORDER TO WORK OUT CERTAIN ALLEGED SUPPRESSED PRODUCTION AND RESULTANT CONCEALED INCOME IN THE CASE OF THE ASSESSEE. THE ASSESSING OFFICER TOOK 1,600 UNITS AS CONSUMPTION PER MT WHICH WAS A LOWEST AS SHOWN BY THE ASSESSEE. THE ASSESSING OFFICER, ACCORDINGLY, WORKED OUT THE ALLEGED SUPPRESSED PRODUCTION AND MADE THE ADDITION IN ALL THE YEARS WHILE COMPLETING THE ASSESSMENTS. IN SUM AND SUBSTANCE THE ASSESSING OFFICER HAD SIMPLY TAKEN THE LOWEST ELECTRICITY CO NSUMPTION FOR A MONTH IN A WHOLE YEAR AND ACCORDINGLY WORKED OUT THE TOTAL PRODUCTION AS PER HIS FORMULA AND ON THE BASIS OF THE FORMULA HE WORKED OUT THE ALLEGED CONCEALED INCOME. THERE ARE CERTAIN IMPORTANT OBSERVATIONS AND FINDINGS OF THE TRIBUNAL WHIC H ARE AS UNDER: 31. IN THE PRESENT CASE, THE SEARCH WAS INITIATED ON 17TH MARCH, 2006 IN THE RESIDENTIAL AND BUSINESS PREMISES OF SRJ PEETY GROUP, JALNA COVERING THE PREMISES OF THE ASSESSEE COMPANY AS WELL. PRIOR TO THE SEARCH, THE RETURNS OF INCOME FOR THE ASST. YRS. 2000 - 01 TO 2005 - 06 HAD ALREADY BEEN FILED UNDER S. 139(1) OF THE ACT ACCOMPANIED BY ALL REQUISITE DOCUMENTS AND PROCEEDING UNDER S. 143(1) OF THE ACT STOOD COMPLETED. DURING THE COURSE OF SEARCH NO INCRIMINATING MATERIALS WERE FOUND RELATIN G TO AFORESAID YEARS WHICH COULD HAVE BEEN ADDED BACK IN THE PROCEEDINGS UNDER S. 153A. THE DETAILS REGARDING THE CONSUMPTION OF ELECTRICITY FOR THE PRODUCTION FOR 36 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) EACH OF THE YEAR UNDER CONSIDERATION WAS VERY WELL PLACED BEFORE THE AUTHORITIES BELOW IN TH E DIRECTORS REPORT OF EACH YEAR. THE SAME HAS NOT BEEN DISPUTED BY THE REVENUE. THE TAX AUDIT REPORT ALSO CONTAINED THE UNIT PRODUCTION OF EACH YEAR WHICH WERE ACCEPTED YEAR AFTER YEAR ALONG WITH THE RETURNS AND NO QUERY WAS EVER RAISED BY THE DEPARTMENT. THE FOLLOWING CHART SHOWS THE YEAR - WISE PRODUCTION VIS - A - VIS ELECTRICITY CONSUMPTION WHICH HAS BEEN PLACED BEFORE THE AUTHORITIES BELOW ALONG WITH THE RETURNS FOR EACH YEAR: ASST. YR. ELECTRICITY CONSUMPTION PRODUCTION (MT) YEARLY AVERAGE CONSUMPTION (U NITS) 2000 - 01 24331059 18,524.239 1313 2001 - 02 25528565 17,010.558 1501 2002 - 03 31404354 19,709.654 1593 2003 - 04 31623843 20,396.313 1550 2004 - 05 43123824 23,240.189 1856 2005 - 06 62650888 29,582.434 2118 2006 - 07 70440580 36,017.983 1956 32. THE MAT TER OF FLUCTUATING CONSUMPTION OF ELECTRICITY CAN BY NO MEANS BE SAID TO BE A FINDING OF SEARCH SINCE ALL DETAILS REGARDING ELECTRICITY VIS - A - VIS PRODUCTION WERE BEFORE THE DEPARTMENT. IF THE DEPARTMENT HAD ANY DOUBTS REGARDING THE SAME, IT COULD HAVE BEEN RAISED DURING THE REGULAR ASSESSMENTS AND NOT IN THE ASSESSMENT RAISED DURING THE REGULAR ASSESSMENTS AND NOT IN THE ASSESSMENT PROCEEDINGS UNDER S. 153A OF THE ACT. WHEN NOTHING INCRIMINATING WAS FOUND IN THE COURSE OF SEARCH RELATING TO ANY OF THESE ASSESSMENT YEARS, THE ASSESSMENTS FOR SUCH YEARS COULD NOT BE DISTU RBED ON THIS GROUND. 33. IN VIEW OF ABOVE FACTUAL AND LEGAL POSITION WE FIND THAT THE ADDITIONS IN QUESTION IN ASST. YRS. 2000 - 01 TO 2005 - 06 ARE NOT CORRESPONDING TO THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH. THE RELEVANT IT RETURNS FOR SAID Y EARS WERE FILED PRIOR TO THE SEARCH IN NORMAL COURSE DISCLOSING THE PARTICULARS OF SUBJECT - MATTERS WERE ALREADY ON RECORD. THE RETURNS HAVE ALREADY BEEN ACCEPTED AND NO ASSESSMENT AS SUCH COULD BE SAID TO BE PENDING ON THE DATE OF INITIATION OF SEARCH AND ABATED IN LIGHT OF THE PROVISIONS OF S. 153A. 34. WITHOUT PREJUDICE TO ABOVE, WITH REGARD TO INVOKING THE PROVISIONS OF S. 145 OF THE ACT, ACCORDING TO WHICH IN CASE THE AO IS NOT SATISFIED ABOUT THE CORRECTNESS OR COMPLETENESS OF ACCOUNTS OF THE ASSESSEE OR WHERE NO METHOD OF ACCOUNTING PROVIDED IN SUB - S. (1) OR ACCOUNTING STANDARDS AS NOTIFIED UNDER SUB - S. (2), HAVE NOT BEEN REGULARLY FOLLOWED BY THE ASSESSEE, THE AO MAY MAKE AN ASSESSMENT IN THE MANNER PROVIDED IN S. 144. SEC. 145 GIVES THE POWER TO AO TO REJECT THE BOOKS IN CERTAIN CIRCUMSTANCES AFTER CONSIDERING THE FOLLOWING ASPECTS: (A) WHETHER THE ASSESSEE HAS REGULARLY EMPLOYED A METHOD OF ACCOUNTING? (B) WHETHER THE ANNUAL PROFITS CAN BE PROPERLY DEDUCED FROM THE METHOD EMPLOYED? 37 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) (C) WHETHER TH E ACCOUNTS MAINTAINED ARE CORRECT AND COMPLETE? 35. WITHOUT PREJUDICE TO ABOVE, WE FIND THAT HAVING REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY FOR ALL THE YEARS UNDER CONSIDERATION, THE AO DEVISED A STATISTICAL FORMULA ON THE BASIS OF ELECTRIC ITY CONSUMPTION THAT WAS APPLIED UNIFORMLY IN ORDER TO WORK OUT CERTAIN PRODUCTION AND RESULTANT CONCEALED INCOME FOR EACH YEAR UNDER CONSIDERATION. THE AO COULD NOT SUBSTITUTE THE SAME BY COGENT REASONING. HE HAS SIMPLY TAKEN THE LOWEST ELECTRICITY CONSUM PTION FOR A MONTH IN THE WHOLE YEAR AND TREATED THE PRODUCTION IN THAT MONTH AS THE CORRECT PRODUCTION AND THEN PROCEEDED TO ARRIVE AT HIS PRODUCTION FIGURE BY MULTIPLYING THE PRODUCTION IN THE BOOKS BY THE RATIO OF PRODUCTION TO THE ELECTRICITY CONSUMPTIO N FOR THE MONTH IN WHICH ELECTRICITY CONSUMPTION WAS MINIMUM. THE METHOD OF COMPUTING THE SO - CALLED SUPPRESSED PRODUCTION IS NOT JUSTIFIED IN ABSENCE OF SOUND BASIS FOR SAME. 36. THE CONSUMPTION OF THE ELECTRICITY FOR THE MANUFACTURE OF MILD STEEL INGOTS/ BILLETS DEPENDS ON VARIOUS FACTORS LIKE QUALITY OF RAW MATERIAL WHICH IS THE MAJOR INPUT, VOLTAGE OF THE SUPPLY, POWER INTERRUPTIONS, MECHANICAL AND ELECTRICAL BREAKDOWNS AND THE CHEMICAL COMPOSITION OF THE LIQUID METAL WHICH HAS TO BE FINALLY CAST INTO IN GOTS/BILLETS. THE AO FAILED TO APPRECIATE THESE FACTS AND DID NOT ATTEMPT TO ESTABLISH A DIRECT NEXUS BETWEEN THE PRODUCTION AND ELECTRICITY CONSUMED FOR THE MANUFACTURE OF ROUND/TMT BARS AND ARRIVED AT A CONCLUSION THAT THERE IS AN EXCESS CONSUMPTION OF E LECTRICITY RESULTING IN SUPPRESSED PRODUCTION AND ALLEGING THAT THE ASSESSEE COMPANY HAS INDULGED IN UNACCOUNTED PRODUCTION. 37. NONE OF THE EVIDENCE COLLECTED AS A RESULT OF SEARCH OR DETECTED DURING THE COURSE OF ASSESSMENT PERTAINS TO THE ASST. YRS. 20 00 - 01 TO DURING THE COURSE OF ASSESSMENT PERTAINS TO THE ASST. YRS. 20 00 - 01 TO 2005 - 06. IT IS AN ACCEPTED FACT THAT EACH YEAR OF THE ASSESSMENT IS INDEPENDENT AND EVIDENCES FOUND RELATING TO ASST. YR. 2006 - 07 CANNOT HAVE AN ADVERSE IMPACT ON THE ASSESSMENTS OF THE ASSESSEE COMPANY FROM THE ASST. YRS. 2000 - 01 TO 2005 - 06. THER EFORE, REJECTION OF BOOKS FOR THESE YEARS PURELY ON THE GROUND THAT THERE HAS BEEN DIVERGENCE IN THE CONSUMPTION OF ELECTRICITY AND APPLICATION OF S. 144 IS NOT AT ALL JUSTIFIED. ACCORDINGLY ADDITIONS HAVE RIGHTLY BEEN DELETED IN ASST. YRS. 2000 - 01 TO 2005 - 06 IN BOTH THE CASES. 23. IT IS CLEAR FROM THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN THE SEARCH AND SEIZURE MATTER AS IT IS HELD THAT THE CONSUMPTION OF ELECTRICITY FOR THE MANUFACTURING OF MILD STEEL INGOTS/BILLETS DEPENDS ON VARIOUS FACTORS AN D THERE WAS NO JUSTIFICATION TO CHARGE THE ASSESSEE THAT THE ASSESSEE HAS SUPPRESSED THE PRODUCTION AND INDULGED INTO UNACCOUNTED PRODUCTION. THE ORDER OF THE TRIBUNAL WAS CHALLENGED BY THE DEPARTMENT BEFORE THE HON'BLE HIGH COURT OF BOMBAY BENCH AT AURAN GABAD BY FILING THE APPEAL U/S. 260A OF THE INCOME - TAX ACT, BEING TAX APPEAL NO. 30 OF 2011. THE REVENUES APPEAL WAS DISMISSED VIDE COMMON JUDGMENT DATED 10 - 02 - 2014, IN THE CASE OF THE ASSESSEE AND OTHER COMPANIES BY THE HON'BLE HIGH COURT AND THERE ARE CATEGORICAL OBSERVATIONS OF THEIR LORDSHIPS ON THE ESTIMATION OF THE PRODUCTION BASED ON THE CONSUMPTION OF THE ELECTRICITY WHICH ARE AS UNDER: 4. IN THAT REGARD, THE TRIBUNAL AS ALSO THE COMMISSIONER OF INCOME TAX (APPEALS) HAVE CONCURRENTLY FOUND THAT THE SEARCH WAS INITIATED ON 17/03/2006 IN THE RESIDENTIAL AND BUSINESS PREMISES OF SRJ PEETY STEELS PVT. LTD. PRIOR TO THE SEARCH, THE RETURNS OF THE INCOME FOR THE ASSESSMENT YEAR 2000 - 01 TO 2005 - 06 HAD ALREADY BEEN FILED U/S. 139(1) OF THE ACT, ACCOMPAN IES BY ALL REQUISITE DOCUMENTS AND PROCEEDINGS. THE SCRUTINY WAS THUS COMPLETED. 38 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) DURING THE COURSE OF SEARCH, NO INCRIMINATING MATERIAL WAS FOUND RELATING TO THE SAID YEARS, WHICH COULD HAVE BEEN ADDED IN THE PROCEEDINGS U/S. 153A. THE DETAILS REGARDING THE CONSUMPTION OF ELECTRICITY FOR THE PRODUCTION FOR EACH OF THE YEAR UNDER CONSIDERATION WAS PLACED BEFORE THE AUTHORITIES IN THE DIRECTORS REPORT OF EACH YEAR. THE SAME HAS NOT BEEN DISPUTED BY THE REVENUE. THE TAX AUDIT REPORT ALSO CONTAINS THE UNI T PRODUCTION OF EACH YEAR, WHICH WAS ACCEPTED YEAR AFTER YEAR ALONG WITH RETURNS AND NO QUERY WAS RAISED BY THE REVENUE. THE FINDING OF FACT DATED 31/03/2008 IN THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL REFERS TO A DETAILED CHART. THE MATTER OF FLUCTUATING ELECTRICITY, THEREFORE, WAS HELD TO BE ONE, AND SINCE DETAILS WERE MADE AVAILABLE TO THE DEPARTMENT, WHICH COULD HAVE BEEN RAISED DURING THE COURSE OF REGULAR ASSESSMENT AND NOT U/S. 153A OF THE ACT. THE FINDING IS THAT NOTHING INCRIMINATIN G WAS FOUND IN THE COURSE OF SEARCH RELATING TO THESE ASSESSMENT YEARS. THE ADDITIONS, THEREFORE, WERE NOT CORRESPONDING TO THE SEIZED MATERIAL DURING THE COURSE OF SEARCH. THE RELEVANT INCOME TAX RETURNS, IN NORMAL COURSE, ARE DISCLOSING THE PARTICULARS . THEY WERE ALREADY ON RECORD. THE RETURNS HAVE BEEN ACCEPTED. IN SUCH CIRCUMSTANCES, THE TRIBUNAL, AS ALSO, THE COMMISSIONER OF INCOME TAX (APPEALS) HAVE IN THEIR ORDERS, HELD THAT THERE ARE SEVERAL FACTORS WHICH HAVE TO BE TAKEN INTO CONSIDERATION AND WHILE ARRIVING AT A CONCLUSION WITH REGARD TO THE ALLEGED PRODUCTION CALCULATED ON THE BASIS OF ELECTRICITY CONSUMPTION. REJECTION OF BOOKS FOR THESE YEARS ONLY ON THE GROUND THAT THERE HAS BEEN DIVERGENCE IN THE CONSUMPTION OF ELECTRICITY, THEREFORE, WAS HELD NOT JUSTIFIED. 24. LD. SPL. AR FOR THE REVENUE ARGUES THAT THE SAID OBSERVATIONS ARE MADE IN THE CONTEXT OF THE ASSESSMENT FRAMED IN CONSEQUENCE OF SEARCH AND SEIZURE OPERATION. WE ARE NOT INCLINED TO ACCEPT THE ARGUMENT OF THE AND SEIZURE OPERATION. WE ARE NOT INCLINED TO ACCEPT THE ARGUMENT OF THE LD. SPL AR FOR T HE REASON THAT EVEN IF THE ASSESSMENTS ARE FRAMED IN CONSEQUENCE OF THE SEARCH AND SEIZURE OPERATION BUT THE IMPORTANT FACT REMAINS THAT NOTHING WAS FOUND DURING THE COURSE OF SEARCH EXCEPT FEW LOOSE SHEETS FOUND IN THE RESIDENCE OF THE DIRECTOR TO MAKE OU T A CASE AGAINST THE ASSESSEE FOR ALLEGED SUPPRESSION OF PRODUCTION OR SALES. IT IS ALSO TO BE TAKEN NOTE OF THE FACT THAT IN A.YS. 2007 - 08 AND 2008 - 09, NO INVESTIGATION HAS BEEN DONE BY THE REVENUE WHICH ARE IMMEDIATE NEXT ASSESSMENT YEARS AFTER THE SEAR CH AND SEIZURE OPERATION AGAINST THE ASSESSEE COMPANY AND HENCE, IN OUR OPINION ABOVE FINDINGS AND OBSERVATION OF THE TRIBUNAL AS WELL AS THE HON'BLE HIGH COURT ARE ALSO IMPORTANT TO DECIDE THE PRESENT APPEALS MORE PARTICULARLY ON THE ADDITIONS BASED ON CO NSUMPTION OF ELECTRICITY. 65. THE TRIBUNAL VIDE PARA 24 TOOK NOTE OF THE FACT THAT IN ASSESSMENT YEARS 2007 - 08 AND 2008 - 09, NO INVESTIGATION WAS DONE BY THE REVENUE AFTER THE SEARCH AND SEIZURE OPERATIONS IN THE IMMEDIATELY PRECEDING YEAR, WHEREIN DURING THE COURSE OF SEARCH, CERTAIN LOOSE SHEETS WERE FOUND IN THE RESIDENCE OF THE DIRECTOR TO MAKE OUT CASE AGAINST THE ASSESSEE FOR ALLEGED SUPPRESSION OF PRODUCTION / SALES. THE TRIBUNAL WHILE DECIDING THE APPEAL IN M/S. SRJ PEETY STEELS PVT. LTD, IN TURN, RELYING ON THE RATIO LAID DOWN BY COORDINATE BENCH OF THE TRIBUNAL, DELETED THE ADDITION MADE ON ACCOUNT OF ALLEGED SUPPRESSION OF PRODUCTION / SALES IN ENTIRETY. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL ARE AS UNDER: - 25. IN THE CASE OF ACIT VS. A.K. ALLOYS (P) LTD. (SUPRA) IN WHICH THE ADDITIONS WERE MADE BY THE A.O. FOR ALLEGED SUPPRESSION OF PRODUCTION AND INVESTMENT IN PURCHASE OF RAW MATERIAL RELYING ON INFORMATION RECEIVED FROM CENTRAL EXCISE (LUDHIANA) AND WHEN MATTER REACHED BEFORE THE TRIBUNA L AND IT IS HELD AS UNDER: 39 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 10. THE ASSESSEE HAD FILED AN APPEAL AGAINST THE ORDER OF CIT CUSTOMS & EXCISE, BEFORE THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WITH PRINCIPAL BENCH AT NEW DELHI (SUPRA). THE COPY OF THE ORDER OF THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL IS PLACED ON RECORD BY THE LEARNED A.R. FOR THE ASSESSEE. THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL AFTER CONSIDERING THE FACTUAL ASPECTS OF THE CASE, THE QUANTUM OF PRODUCTION, THE CONSUMPTION OF ELECTRICITY OBSE RVED THAT THERE IS NOTHING ON RECORD TO SHOW THAT HIGH POWER CONNECTION SUPPORTED BY EVIDENCE WAS MADE ON A PARTICULAR DATE AND THAT RESULTED IN HIGHER AMOUNT OF PRODUCTION. IT WAS FURTHER OBSERVED BY THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL VI DE PARA 4.2 THAT SO FAR AS THE PRODUCTION QUANTUM IS CONCERNED, THERE IS ALSO NO EVIDENCE ON RECORD TO SHOW THAT THE AUTHORITIES INTERVENED LAWFULLY RECORDING THE OUTPUT IN THE PRESENCE OF WITNESS. THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL HELD THAT THEREFORE, A HYPOTHETICAL CASE APPEARS TO HAVE BEEN MADE BY REVENUE IN EXCESSIVE EXERCISE OF ITS JURISDICTION TO THE DETRIMENT OF JUSTICE. THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL FURTHER CONSIDERED THE RETRACTION STATEMENT OF THE DIRECTOR OF THE ASSESSEE COMPANY AND VIDE PARA 6 HELD AS UNDER: '6. WE WOULD HAVE CERTAINLY COME TO THE RESCUE OF REVENUE HAD THE STATEMENT BEEN RECORDED IN A MANNER KNOWN TO LAW AND COGENT EVIDENCE HAD BEEN BROUGHT TO RECORD TO PROVE OUTPUT CLEARED CLANDESTINELY. NO COGENT EVIDENCE IS ON RECORD TO SHOW EITHER SUPPRESSION OF PURCHASE OF INPUT OR CLANDESTINE REMOVAL OF GOODS IN FOOL PROOF MANNER KNOWN TO LAW FOR WHICH, IT CAN BE PAINFULLY SAID THAT THE ADJUDICATION HAS NO LEGS TO STAND. BOTH THE APPEALS ARE THEREFOR E, ALLOWED WITH CONSEQUENTIAL RELIEF, IF ANY.' CONSEQUENTIAL RELIEF, IF ANY.' 11. THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL CATEGORICALLY HELD THAT THE ELECTRICITY CONSUMPTION COULD NOT BE CRITERIA TO DETERMINE THE OUTPUT LAID DOWN IN R.A. CASTINGS, WHERE THE APPEAL OF THE RE VENUE WAS DISMISSED BY THE HON'BLE APEX COURT AS REPORTED IN 2011 (269) ELT A - 108 (SC). THE BASIS FOR THE ADDITION IN THE PRESENT CASE WAS THE INVESTIGATION REPORT OF THE CENTRAL EXCISE DEPARTMENT AND THE SUPPRESSION IN PRODUCTION CALCULATED BY THE SAID IN VESTIGATING TEAM. THE ASSESSING OFFICER HAD COMPLETELY BASED ITS ADDITION ON THE AFORESAID REPORT OF THE INVESTIGATING TEAM AND HAD ALSO SHOW CAUSED THE ASSESSEE TO ESTABLISH ITS POINT IN VIEW OF THE SAID REPORT OF THE INVESTIGATING TEAM. THE CUSTOMS, EXC ISE & SERVICE TAX APPELLATE TRIBUNAL (SUPRA) IN THE APPEAL FILED BY THE ASSESSEE AND ITS DIRECTOR HAS CATEGORICALLY HELD THAT NO COGENT EVIDENCE HAS BEEN BROUGHT ON RECORD TO PROVE THAT THE OUTPUT HAD BEEN CLEARED CLANDESTINELY. FURTHER IT HAS BEEN HELD TH AT THERE WAS NO COGENT EVIDENCE TO SHOW EITHER SUPPRESSION OF PURCHASE OF INPUT OR REMOVAL OF GOODS. IN VIEW OF THE AFORESAID FINDINGS OF THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL IN ASSESSEE'S OWN CASE THERE IS NO MERIT IN ANY ADDITION BEING MA DE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF THE ALLEGED SUPPRESSION IN PRODUCTION AND ALSO ALLEGED INVESTMENT IN PURCHASE OF RAW MATERIAL. IN VIEW THEREOF, WE HOLD THAT NO ADDITION ON ACCOUNT OF PROFIT ON THE SALE OF UNACCOUNTED PRODUCTION OR ON ACCOUNT OF UNEXPLAINED INVESTMENT MERITS TO BE MADE IN THE HANDS OF THE ASSESSEE. WE ARE ALSO IN AGREEMENT WITH 40 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) THE OBSERVATIONS OF CIT (APPEALS) IN DELETING THE AFORESAID ADDITION AS NO INDEPENDENT EVIDENCE HAS BEEN BROUGHT ON RECORD TO ESTABLISH THAT THE ASSESSE E HAD, A) SUPPRESSED ITS PRODUCTION AND; B) IT MADE SALE OF ITS UNACCOUNTED PRODUCTION, OUTSIDE THE BOOKS OF ACCOUNT. UPHOLDING THE ORDER OF THE CIT (APPEALS) WE DISMISS THE GROUND NOS.1 AND 2 RAISED BY THE REVENUE. 26. IN THE CASE OF ACIT VS. ARORA ALLOY S LTD. (SUPRA) THE ADDITION WAS MADE ON THE BASIS OF ELECTRICITY CONSUMPTION TO PRODUCE 1 MT OF INGOTS. THE CONFESSIONAL STATEMENT WAS ALSO GIVEN BY THE MANAGING DIRECTOR OF THE SAID COMPANY BEFORE THE CENTRAL EXCISE AUTHORITIES. THE LD. CIT(A) ALLOWED T HE ASSESSEES APPEAL. THE REVENUE CHALLENGED THE ORDER OF LD. CIT(A) BEFORE THE TRIBUNAL. IT WAS HELD THAT THERE WAS NO JUSTIFICATION TO SUPPORT THE SAID ADDITION AND THE REVENUES APPEAL WAS DISMISSED. IN THE LIGHT OF OUR ABOVE DISCUSSION, WE ARE OF TH E OPINION THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY LD. CIT(A) IN BOTH THE ASSESSMENT YEARS BASED ON THE ORDER PASSED BY THE CCE, AURANGABAD AS WELL AS ON THE BASIS OF CONSUMPTION OF THE ELECTRICITY USED IN MANUFACTURING OF INGOTS/B ILLETS ARE NOT SUSTAINABLE. WE, ACCORDINGLY, DELETE THE ADDITIONS MADE TOWARDS THE ALLEGED SUPPRESSION OF PRODUCTION AND SALES AT ENTIRETY AND ALLOW THE GROUND NOS. 3, 4, 5, 6 & 8 IN THE A.Y. 2007 - 08 AND GROUND NOS. 2,3,4 & 6 IN THE A.Y. 2008 - 09. 66. TH E TRIBUNAL THEREAFTER, HELD THAT THERE WAS NO MERIT IN THE REJECTION OF BOOKS OF ACCOUNT AND APPLICATION OF GROSS PROFIT TO DETERMINE THE INCOME IN THE HANDS OF THE ASSESSEE. THE TRIBUNAL ALSO GAVE A FINDING THAT SINCE THE ADDITIONS MADE IN THE HANDS OF T HE ASSESSEE HAVE BEEN DELETED, THERE WAS NO MERIT IN ANY ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT IN RESPECT OF THE UNDISCLOSED TURNOVER. THE TRIBUNAL VIDE PARAS 27 TO 29 HELD AS UNDER: - 27. THE NEXT ISSUE IS THE REJECTION OF BOOKS OF ACCOUNT BY TH E ASSESSING 27. THE NEXT ISSUE IS THE REJECTION OF BOOKS OF ACCOUNT BY TH E ASSESSING OFFICER IN BOTH THE ASSESSMENT YEARS. WE FIND THAT THE ONLY REASON FOR REJECTION OF THE BOOKS OF ACCOUNT WAS THE ALLEGED SUPPRESSION OF PRODUCTION/SALES AND WHICH WAS DETERMINED ON THE BASIS OF THE ADJUDICATION ORDER PASSED BY THE CCE, AURANGA BAD AS WELL AS THE CONSUMPTION OF THE ELECTRICITY USED IN THE MANUFACTURING OF THE INGOTS/BILLETS RELYING ON THE TECHNICAL OPINION OF DR. BATRA, IIT, KANPUR. NO OTHER REASONS ARE GIVEN BY THE ASSESSING OFFICER. WE HAVE ALREADY HELD THAT THE ASSESSING OFFIC ER WAS NOT JUSTIFIED IN MAKING THE ADDITIONS TOWARDS ALLEGED SUPPRESSION OF PRODUCTION/SALES. WE, THEREFORE, HOLD THAT THE REJECTION OF THE BOOKS OF ACCOUNT ON ABOVE REASON CANNOT BE UPHELD. WE, ACCORDINGLY, ALLOW GROUND NO. 7 IN THE A.Y. 2007 - 08 AND GRO UND NO. 5 IN THE A.Y. 2008 - 09. 28. THE NEXT ISSUE IS THE PERCENTAGE OF THE GROSS PROFIT ESTIMATED BY THE LD. CIT(A) ON THE ALLEGED SUPPRESSED SALES AND SAID ISSUE ARISES FROM GROUND NO. 9 IN THE A.Y. 2007 - 08 AND GROUND NO. 7 IN THE A.Y. 2008 - 09 ARE ON. AS THE ASSESSEE HAS SUCCEEDED ON THE MAIN GROUNDS AS ENTIRE ADDITIONS MADE BY THE ASSESSING OFFICER ARE DELETED, THE GROUND NO. 9 IN THE A.Y. 2007 - 08 AND GROUND NO. 7 IN THE A.Y. 2008 - 09 BECOME INFRUCTUOUS. 29. IN GROUND NO. 10, THE ASSESSEE HAS RAISED THE OBJECTION FOR MAKING THE ADDITION OF RS.37,69,582/ - . THE SAID ADDITION IS MADE BY THE LD. CIT(A). HE HAS OBSERVED THAT THERE IS AN ELEMENT OF THE UNDISCLOSED INVESTMENT IN RESPECT OF THE UNDISCLOSED TURNOVER WHICH IS ESTIMATED AS AN AVERAGE UNDISCLO SED TURNOVER OF THE HALF PERIOD OF THE EARLIER YEAR UNDER APPEAL. THE LD. CIT(A) HAS OBSERVED THAT THE UNDISCLOSED SALE FOR THE EARLIEST YEAR UNDER APPEAL ARE OF RS.39,20,36,546/ - AND THE SAID INVESTMENT REQUIRED FOR PRODUCTION OUT OF BOOKS, THEREFORE, WO RKED OUT RS.37,69,582/ - . IN FACT, THE SAID ADDITION IS MADE BY THE LD. CIT(A) AS HE HAS CONFIRMED THE ALLEGED SUPPRESSION OF PRODUCTION/SALES AS HELD BY THE ASSESSING OFFICER. AS THE ASSESSEE HAS SUCCEEDED IN GETTING THE RELIEF BY DELETING THE ENTIRE ADD ITIONS 41 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) TOWARDS ALLEGED SUPPRESSION OF PRODUCTION AND SALES, HENCE, THIS ADDITION DOES NOT SURVIVE AND SAID ADDITION IS ALSO DELETED. WE, ACCORDINGLY, ALLOW THE GROUND NO. 10 TAKEN BY THE ASSESSEE. 67. THE TRIBUNAL ALSO DISMISSED THE APPEAL OF THE REVENU E AGAINST THE ESTIMATION OF GROSS PROFIT BY THE CIT(A) OBSERVING AS UNDER: - 31. WE HAVE HEARD THE PARTIES. THE MAIN GRIEVANCE OF THE REVENUE IS AGAINST THE ESTIMATION OF GP BY LD. CIT(A). WE HAVE ALREADY ALLOWED THE GROUNDS TAKEN BY THE ASSESSEE ON THE ALLEGED SUPPRESSION OF THE PRODUCTION/SALES. AS THE ASSESSEE HAS SUCCEEDED ON THE BASIC ADDITIONS, THE GROUNDS TAKEN BY THE REVENUE DO NOT SURVIVE AS THE ENTIRE ADDITIONS ARE DELETED IN BOTH THE ASSESSMENT YEARS BY ALLOWING THE GROUNDS TAKEN BY THE ASSES SEE. ACCORDINGLY, ALL THE GROUNDS OF THE REVENUE IN BOTH APPEALS ARE DISMISSED. 68. THE PLEA OF THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE US WAS THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE RATIO LAID DOWN I N M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA). SINCE THE BASIS FOR ADDITION WAS THE CONSUMPTION OF ELECTRICITY, THOUGH ON DIFFERENT GROUND I.E. CONSUMPTION OF ELECTRICITY AS PER US STANDARD. HOWEVER, THE LD. SPECIAL AR STRESSED THAT THE ISSUE RAISED IN THE P RESENT APPEAL WAS AT VARIANCE. VIDE HIS WRITTEN SUBMISSIONS, HE HAS RAISED IDENTICAL GROUNDS OF APPEAL AND HAD ELABORATELY TOOK US THROUGH VARIOUS SUBMISSIONS AND HAS RELIED ON DIFFERENT CASE LAWS. THE CONTENTION OF THE LD. SPECIAL AR IS SHEER WASTE OF P ROCESS OF LAW, WHEREIN THE SUBMISSIONS MADE BEFORE THE TRIBUNAL IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) HAVE BEEN VERBATIM REPEATED IN THE APPEAL FILED AGAINST THE ASSESSEE BEFORE US I.E. SHREE OM ROLLING MILLS PVT. LTD. 69. WE FIND THAT THE ASSESSIN G OFFICER IN THE PRESENT CASE BEFORE US HAD MADE THE ADDITION ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY BASED ON THE THE ADDITION ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY BASED ON THE CONSUMPTION OF ELECTRICITY AS PER US STANDARDS. THE ASSESSING OFFICER HAD NOT ADOPTED THE US STANDARDS IN ENTIRETY, BUT HAD ALLOWED A CREDIT OF 25% AND WORK THE ADDITION. THE ADDITION IN THE HANDS OF SISTER CONCERN M/S. SRJ PEETY STEELS PVT. LTD. WAS MADE ON THE BASIS OF THE REPORT OF ONE DR. BATRA WITH REGARD TO ELECTRIC CONSUMPTION AND THE THIRD MEMBER OF CESTAT HAD DELETED THE AFO RESAID ADDITION MADE UNDER THE EXCISE LAW. HOWEVER, IN THE CASE OF ASSESSEE BEFORE US, THERE IS NO ORDER OF CCE, AURANGABAD OR OF CESTAT AND THE ASSESSING OFFICER WORKED OUT THE ADDITION ON THE BASIS OF ERRATIC CONSUMPTION OF ELECTRICITY VIS - - VIS THE CO NSUMPTION AS PER US STANDARDS AFTER GIVING BENEFIT OF 25%. FOLLOWING THE SAME LINE OF REASONING AS IN THE ORDER OF M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA), WE FIND NO MERIT IN THE ADDITION MADE IN THE HANDS OF THE ASSESSEE ON SURMISES. BOTH THE LEARNED A UTHORIZED REPRESENTATIVE FOR THE ASSESSEE AND LD. SPECIAL AR BY WAY OF WRITTEN SUBMISSIONS HAS RAISED IDENTICAL ARGUMENTS AS IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) AND SINCE THE TRIBUNAL HAS ALREADY DECIDED THE ISSUE IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA), THE RATIO OF THE SAID DECISION IS APPLICABLE TO THE FACTS OF THE PRESENT CASE. 70. ANOTHER OBJECTION RAISED BY THE LD. SPECIAL AR BEFORE US DURING THE COURSE OF HEARING OF THE BUNCH OF APPEALS WAS THAT IT HAD MOVED MISCELLANEOUS APPLICATION AGA INST THE ORDER OF TRIBUNAL DATED 16.01.2015 AND THE HEARING OF THE PRESENT APPEALS BE KEPT IN ABEYANCE. AFTER HEARING THE APPEALS IN THE PRESENT BUNCH OF APPEALS, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA ) WAS ALSO FIXED FOR HEARING AND THE SAME WAS HEARD ON 19.06.2015. WE HAVE BY AN ORDER OF EVEN DATE DISMISSED THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE AUTHO RIZED REPRESENTATIVES. WE HAVE BY AN ORDER OF EVEN DATE HELD THAT THERE IS NO MERIT IN THE SAID MISCELLANEOUS APPLICATION FILED BY THE REVENUE AND NO REMEDY IS AVAILABLE TO THE REVENUE UNDER SECTION 254(2) OF THE ACT. IN VIEW THEREOF, THE NEXT OBJECTION OF THE LD. SPECIAL AR 42 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) FOR NOT RELYING ON THE ORDER OF M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) ALSO STANDS DISMISSED. 71. FURTHER, THE TRIBUNAL IN THE CASE OF ANOTHER ROLLING MILLS I.E. MAHAVEER STEEL RE - ROLLING MILLS VS. ACIT IN ITA NOS.1072 TO 1076/PN /2012 AND ACIT VS. MAHAVEER STEEL RE - ROLLING MILLS IN ITA NOS.1446 TO 1450/PN/2012, RELATING TO ASSESSMENT YEARS 2004 - 05 TO 2008 - 09 VIDE ORDER DATED 05.03.2015 HAD APPLIED THE RATIO LAID DOWN BY THE TRIBUNAL IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) AND H ELD THAT THE ADDITION MADE TOWARDS ALLEGED SUPPRESSED PRODUCTION AND SALES ON THE BASIS OF CONSUMPTION OF ELECTRICITY WAS DELETED. IN OUR OPINION, THE ADDITION MADE BY THE ASSESSING OFFICER BY RELYING ON THE CONSUMPTION OF ELECTRICITY UNDER US STANDARDS, BY NO STRETCH OF IMAGINATION, CAN BE APPLIED UNDER INDIAN CONDITIONS, IN THE ABSENCE OF ANY FINDING THAT THE CONDITIONS FOR CARRYING OUT MANUFACTURING ACTIVITY IN US AND INDIA WERE SAME. THE BENEFIT OF 25% ALLOWED IS WITHOUT ANY BASIS AND HAS NO LEGS TO S TAND. THE ADDITION MADE BY THE ASSESSING OFFICER IS ON PURE ESTIMATES, CONJUNCTURE AND SURMISES AND THE SAME CANNOT BE ACCEPTED. WE HEREBY DELETE THE SAME. 72. ANOTHER ASPECT OF THE ISSUE IN RELATION TO THE ADDITION ON ACCOUNT OF SUPPRESSED PRODUCTION, RAISED BEFORE US IS THAT WHERE THE ASSESSING OFFICER HAD EVIDENCE OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, THE ADDITION COULD BE UPHELD IN THE HANDS OF THE ASSESSEE BY EXTRAPOLATING THE SALES FOR PERIOD OF 300 DAYS. THE LD. SPEC IAL AR FOR THE SAID PROPOSITION RELIED ON THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2006 - 07. THE CASE OF THE REVENUE BEFORE US WAS THAT WHERE THE ASSESSEE HAD ADMITTED TO CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMEN T OF EXCISE DUTY BEFORE THE SETTLEMENT COMMISSION FOR PART OF THE PERIOD, THEN IN VIEW OF THE ORDER OF THE SETTLEMENT COMMISSION AND ALSO SINCE THE ASSESSEE HAD ADMITTED TO ADDITIONAL INCOME ON SUCH ACCOUNT BEFORE THE ASSESSING OFFICER, THE SALES FOR THE E NTIRE YEAR SHOULD BE EXTRAPOLATED. THE BASIS FOR DECLARATION OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY WAS ON ACCOUNT OF SEARCH AND SEIZURE PROCEEDINGS WITHOUT PAYMENT OF EXCISE DUTY WAS ON ACCOUNT OF SEARCH AND SEIZURE PROCEEDINGS CONDUCTED BY DGCEI ON CERTAIN BROKERS AND SUB - BROKERS. CONSEQUENT THERETO, SHR I SRJ PEETY, PERSON IN - CHARGE OF SHREE OM ROLLING MILLS PVT. LTD. ADMITTED TO THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY AND APPROACHED THE SETTLEMENT COMMISSION FOR PAYMENT OF EXCISE DUTY ON THE SAID AMOUNT. THE SETTLEMENT CO MMISSION ACCEPTED THE PETITION OF THE ASSESSEE, BUT ALSO LEVIED PENALTY OF RS.9,000/ - . THE ASSESSEE BEFORE THE ASSESSING OFFICER ADMITTED THAT THE ADDITIONAL INCOME IN RESPECT OF THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, IS TO BE ADDED IN THE HANDS OF THE ASSESSEE. ALL THIS INFORMATION WAS AVAILABLE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BUT NO OTHER INVESTIGATION OR INQUIRY WAS MADE BY THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER ON THE OTHER HAND, WAS OF THE VIEW THAT THE ASSESSEE HAD NOT CORRECTLY DISCLOSED THE PRODUCTION OF TMT BARS. THE BASIS FOR SUCH ASSUMPTION WAS THE ELECTRICITY CONSUMPTION, FOR WHICH THE ASSESSING OFFICE R PLACED RELIANCE ON THE RESULTS OF ELECTRICITY CONSUMPTION UNDER US STANDARDS AGAINST WHICH, HANDICAP OF 25% WAS GIVEN. THE ASSESSING OFFICER APPLYING THE FORMULA WORKED OUT THE SUPPRESSED PRODUCTION AND SALES IN THE HANDS OF THE ASSESSEE. WE IN THE PAR AS HEREINABOVE HAVE ALREADY ADJUDICATED THE ISSUE THAT NO ADDITION ON ACCOUNT OF SUPPRESSED PRODUCTION / SALES ON ACCOUNT OF SUCH FORMULA COULD BE MADE IN THE HANDS OF THE ASSESSEE. THE LD. SPECIAL AR ON THE OTHER HAND, STRESSED THAT WHERE THE ASSESSING O FFICER HAD THE INFORMATION OF ALLEGED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY AND ALSO BECAUSE OF THE ADMISSION OF THE ASSESSEE BEFORE THE ASSESSING OFFICER, THE SALES FOR THE PERIOD OF 300 DAYS SHOULD BE EXTRAPOLATED IN THE HANDS OF THE ASSESSEE. HE STRESSED THAT EVEN WHERE THE EVIDENCE OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY AND SUPPRESSION OF INCOME WAS FOUND FOR THE PART OF THE YEAR, THEN THE ASSESSING OFFICER CAN ESTIMATE THE ADDITIONAL INCOME FOR WHOLE OF THE YEAR. MERELY BECAUSE THE ASSESSING OFFICER HAD ADOPTED ANOTHER METHODOLOGY OF SUPPRESSION, THE ADDITION IN THE HANDS OF THE ASSESSEE COULD BE SUSTAINED ON THE BASIS OF EXTRAPOLATION OF SALES FOR 300 DAYS, IN VIEW OF THE ADMISSION OF THE ASSESSEE O F 43 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY AND SUPPRESSION OF INCOME. 73. THE EVIDENCE OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY WAS DETECTED BY THE EXCISE AUTHORITIES DURING THE COURSE OF SEARCH AND SEIZURE OPERATION ON CERTAIN BROKERS, HOWEVER, NO SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AGAINST THE ASSESSEE. IN ORDER TO BUY PEACE OF MIND, THE ASSESSEE DECLARED THE SAID AMOUNT VIDE PETITION BEFORE THE SETTLEMENT COMMISSION, WHICH HAS BEEN ACCEPTED BY T HE SETTLEMENT COMMISSION IN TOTO. THE LD. SPECIAL AR OBJECTED TO THE PLEA OF ASSESSEE THAT DECLARATION WAS TO BUY PEACE OF MIND, BUT WE FIND NO MERIT IN THE SAME, SINCE THE OBJECT OF MOVING PETITION BEFORE THE SETTLEMENT COMMISSION IS TO SETTLE THE DISPUT E. IN CASES WHERE ANY SETTLEMENT PETITION IS MOVED BY THE CLAIMANTS, THE AUTHORITIES HAVE THE POWER TO RE - VISIT THE OFFER MADE BY THE CLAIMANT AND WHERE ANY ADVERSE MATERIAL IS AVAILABLE AGAINST THE PERSON MAKING THE OFFER, THEN THE FIGURES OF SETTLEMENT CAN BE INCREASED. HOWEVER, IN THE CASE OF THE ASSESSEE, OFFER OF THE ASSESSEE HAS BEEN ACCEPTED FOR THE FINANCIAL YEAR AND THE SAME CANNOT BE SAID TO BE RESTRICTED TO THE NUMBER OF DAYS FOR WHICH IT WAS OFFERED. THE BASIS OF ANY SETTLEMENT IS THE OFFER M ADE BY THE CLAIMANT AND/OR THE EVIDENCE FOUND AGAINST THE PERSON OFFERING THE SETTLEMENT AND WHERE THE EVIDENCE HAS BEEN FOUND FOR PART OF THE YEAR, SUCH SETTLEMENT BEING ACCEPTED IS RELATABLE TO THE YEAR UNDER CONSIDERATION. IN CASES WHERE THE PETITION I S ACCEPTED IN THE HANDS OF THE ASSESSEE BY THE SETTLEMENT COMMISSION, THEN NO FURTHER ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF ALLEGED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY OR SUPPRESSED SALES FOR THE BALANCE PERIOD, IN THE ABSENCE OF ANY EVIDENCE FOUND AGAINST THE ASSESSEE FOR THE BALANCE PERIOD. 74. ANOTHER ASPECT OF THE ISSUE IS THAT THOUGH THE FACTUM OF THE ASSESSEE FILING THE PETITION BEFORE THE SETTLEMENT COMMISSION, WAS BEFORE THE ASSESSING OFFICER, EVEN ADDITIONAL INCOME ON SUCH OFFER OF SETTLEMENT WAS OFFERED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER, HOWEVER, NO FURTHER INQUIRY, INVESTIGATION OR ACTION WAS TAKEN BY ASSESSING OFFICER IN THIS REGARD. IN THE ABSENCE OF THE SAME, THE WAS TAKEN BY ASSESSING OFFICER IN THIS REGARD. IN THE ABSENCE OF THE SAME, THE ISSUE RAISED I N THE PRESENT APPEAL IS WHETHER ANY EXTRAPOLATION OF SALES FOR THE BALANCE YEAR ON THE BASIS OF EVIDENCE FOUND FOR THE PART OF THE YEAR IS JUSTIFIED OR NOT. THE ANSWER, IN OUR OPINION, HAS TO BE IN NEGATIVE. 75. THE LD. SPECIAL AR VEHEMENTLY RELIED ON THE RATIO LAID DOWN BY THE TRIBUNAL IN ASSESSEES OWN CASE REPORTED IN 137 TTJ (PUNE) 627, WHICH IN TURN HAS BEEN APPROVED BY THE HONBLE BOMBAY HIGH COURT. IT MAY BE POINTED OUT THAT THE FACTS OF THE CASE BEFORE THE TRIBUNAL IN ASSESSMENT YEAR 2006 - 07 AR E AT VARIANCE. THE ADDITION IN THE HANDS OF THE ASSESSEE WAS MADE ON THE BASIS OF SEARCH AND SEIZURE ACTION CARRIED OUT BY THE INCOME - TAX DEPARTMENT AND THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH, WHICH WERE ADMITTED BY THE ASSESSEE TO REFLECT SUPPRE SSION OF SALES. ON THE BASIS OF AFORESAID DOCUMENTS, THE INCOME FOR THE YEAR WAS EXTRAPOLATED, WHICH ORDER OF THE TRIBUNAL WAS APPROVED BY THE HONBLE BOMBAY HIGH COURT. HOWEVER, FOR THE YEAR UNDER CONSIDERATION, THERE WAS NO SEARCH AND SEIZURE OPERATION CARRIED OUT BY THE INCOME - TAX DEPARTMENT AGAINST THE ASSESSEE AND ALSO NO INVESTIGATION OR INQUIRY WAS MADE BY THE ASSESSING OFFICER, AS STATED EARLIER. IN THE ABSENCE OF ANY EVIDENCE COLLECTED AGAINST THE ASSESSEE, MERELY BECAUSE THE ADDITION WAS MADE I N THE HANDS OF THE ASSESSEE IN A PRECEDING YEAR, WE FIND NO MERIT IN THE SUBMISSIONS OF THE ASSESSEE THAT FOLLOWING THE SAME RATIO, EXTRAPOLATION OF SALES FOR THE ASSESSMENT YEAR 2007 - 08 SHOULD BE MADE IN THE HANDS OF THE ASSESSEE, IN VIEW OF THE SETTLEMEN T PETITION BY THE ASSESSEE BEFORE THE SETTLEMENT COMMISSION. THE PERUSAL OF THE ASSESSMENT ORDER AND THE ORDER OF CIT(A) REFLECTS NO SUCH BASIS WAS ADOPTED FOR MAKING THE ADDITION IN THE HANDS OF THE ASSESSEE. THE SOLE BASIS ON WHICH THE ADDITION IN THE HANDS OF THE ASSESSEE MADE WAS ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY. UNDOUBTEDLY, BOTH THE ASPECTS I.E. THE PETITION MADE BY THE ASSESSEE BEFORE THE SETTLEMENT COMMISSION PURSUANT TO SEARCH CONDUCTED BY THE DGCEI AND ALSO THE OTHER BASIS I.E. ERRATIC CONSUMPTION OF ELECTRICITY, WERE BEFORE THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFICER ADOPTED THE SECOND ISSUE IN THE HANDS OF THE ASSESSEE AND MADE THE AFORESAID ADDITION, WHICH WE IN THE PARAS HEREINABOVE HAD ALREADY 44 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) DELETED. THE LD. SP ECIAL AR POINTED OUT THAT THE SAID ACTION OF THE ASSESSING OFFICER WAS ONE OF THE METHODOLOGIES FOR WORKING OUT THE ADDITIONAL INCOME OF THE ASSESSEE. WE FIND NO MERIT IN THE STAND OF THE LD. SPECIAL AR SINCE NO INVESTIGATION OR INQUIRY WAS CARRIED OUT BY THE ASSESSING OFFICER AND MERELY ON THE BASIS OF PETITION FILED BEFORE THE SETTLEMENT COMMISSION, WHICH IN TURN HAS BEEN ACCEPTED, NO FURTHER ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND FOR THE BALA NCE PERIOD. 76. RELIANCE IN THIS REGARD IS PLACED UPON THE RATIO LAID DOWN IN RAVI FOODS PVT. LTD. VS. CCE, HYDERABAD (SUPRA). IN THE FACTS OF THE SAID CASE, CERTAIN DOCUMENTS WERE FOUND BY THE INCOME - TAX DEPARTMENT PURSUANT TO SEARCH AND SEIZURE ACTION, WHICH INDICATED CLEARANCE IN SALES, ON THE BASIS OF WHICH THE ADDITIONAL INCOME WAS ADDED IN THE HANDS OF THE ASSESSEE. THE SAID INFORMATION WAS FORWARDED TO THE CENTRAL EXCISE DEPARTMENT PURSUANT TO WHICH, ORDER LEVYING ADDITIONAL EXCISE DUTY WAS PASSED BY THE EXCISE COMMISSIONER. HOWEVER, THE TRIBUNAL CANCELLED THE EXCISE DEMAND ON THE GROUND THAT THERE WAS NO CORROBORATIVE EVIDENCE OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY WAS FOUND FROM THE POSSESSION OF THE ASSESSEE BY THE EX CISE AUTHORITIES. 77. FOLLOWING THE SAME ANALOGY OF REASONING, WHERE THE EVIDENCE OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY HAS BEEN FOUND BY THE EXCISE DEPARTMENT, IN RESPECT OF SALE OF GOODS FOR A PARTICULAR QUANTITY AND FOR A PARTICULAR PERIOD, THE SAME COULD NOT BE RELIED UPON AS EVIDENCE, WHILE EXTRAPOLATING THE SALES AND THE ADDITIONAL INCOME THEREON IN THE HANDS OF THE ASSESSEE DURING THE INCOME - TAX PROCEEDINGS. THE ASSESSING OFFICER DOES NOT HAVE ANY EVIDENCE FOR SUPPRESS ED PRODUCTION AND EVEN AFTER THE ORDER OF SETTLEMENT COMMISSION, THE ASSESSING OFFICER HAD NOT INVESTIGATED OR BROUGHT ANY MATERIAL ON RECORD ESTABLISHING SUPPRESSED PRODUCTION AND / OR ITS SALE OUTSIDE THE BOOKS OF ACCOUNT. 78. THE LD. SPECIAL AR TIME AN D AGAIN STRESSED THAT THE ASSESSEE HAD MADE ADMISSION BEFORE THE ASSESSING OFFICER AND THIS WAS THE EVIDENCE AVAILABLE WITH THE ADMISSION BEFORE THE ASSESSING OFFICER AND THIS WAS THE EVIDENCE AVAILABLE WITH THE ASSESSING OFFICER. THE ALLEGED ADMISSION BEFORE THE ASSESSING OFFICER WAS ONLY BY WAY OF THE ADDITIONAL INCOME OFFERED BY THE A SSESSEE, WHICH WAS RELATABLE TO THE CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY ADMITTED BEFORE THE DGCEI AND OFFERED BY WAY OF PETITION BEFORE THE SETTLEMENT COMMISSION. NO STATEMENT OF DIRECTORS OF THE ASSESSEE COMPANY WAS RECORDED EI THER BY ASSESSING OFFICER OR CIT(A) DURING THE COURSE OF ASSESSMENT PROCEEDING. ACCORDINGLY, WE FIND NO MERIT IN THE RELIANCE PLACED UPON BY THE LD. SPECIAL AR IN THIS REGARD. THE ADDITION AT BEST IS TO BE RESTRICTED TO THE ADDITIONAL INCOME OFFERED BY T HE ASSESSEE. 79. IN OUR CONSIDERED OPINION, THE ISSUE IN HAND IS TO BE DECIDED ON THE BASIS OF FINDINGS OF THE ASSESSING OFFICER AND CIT(A) AND THE TRIBUNAL CANNOT TRAVERSE BEYOND THE ORDERS OF ASSESSING OFFICER AND CIT(A). ADMITTEDLY, THE PARTIES CAN RAISE AN ADDITIONAL PLEA BEFORE THE TRIBUNAL JUSTIFYING THE ADDITION. HOWEVER, THE SAID PLEA HAS TO BE DECIDED KEEPING IN MIND THE FACTS OF THE CASE. THOUGH BOTH THE ASSESSING OFFICER AND CIT(A) HAD NOT MADE THE ADDITION IN THE HANDS OF THE ASSESSEE ON THE BASIS OF PETITION FILED BEFORE THE SETTLEMENT COMMISSION, BUT HAD ADOPTED THE ERRATIC CONSUMPTION OF ELECTRICITY AS BASIS TO MAKE THE ADDITION, WE HAVE ADJUDICATED THE ALTERNATE PLEA RAISED BY THE LD. SPECIAL AR IN THIS REGARD AND DISMISSED THE SAME. 80. NOW, WE COME TO THE RELIANCE PLACED UPON BY BOTH THE AUTHORIZED REPRESENTATIVES IN SUPPORT OF INDIVIDUAL PROPOSITION VIS - - VIS THE ADDITION ON ACCOUNT OF EXTRAPOLATION OF SALES FOR THE PERIOD OF 300 DAYS. 81. THE LD. SPECIAL AR FURTHER RELIED ON SERIES OF DECISIONS UNDER THE EXCISE AUTHORITIES FOR THE PROPOSITION THAT THE CONFESSIONAL STATEMENT BEFORE THE EXCISE DEPARTMENT WAS AN IMPORTANT PIECE OF EVIDENCE. WE ARE IN AGREEMENT WITH THE SAID PROPOSITION LAID DOWN BY THE HONBLE SUPREME COURT IN P ULLANGODE RUBBER PRODUCE CO. LTD. VS. STATE OF KERALA AND ANOTHER (SUPRA), BUT THE STATEMENT MADE 45 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) BEFORE ANY OF THE AUTHORITIES IS LIMITED TO THE AMOUNTS SURRENDERED VIDE THE SAID SETTLEMENT AND NO INFERENCE COULD BE DRAWN AGAINST THE ASSESSEE FOR EXTRAPOL ATING THE SAME FOR FULL YEAR AND FOR THE BALANCE YEAR AND IN OTHER YEARS, OTHER THAN THE YEAR IN WHICH THE SAID SETTLEMENT WAS OFFERED. IN THIS REGARD, WE FIND SUPPORT FROM YEAR IN WHICH THE SAID SETTLEMENT WAS OFFERED. IN THIS REGARD, WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE BANGALORE BENCH OF TRIBUNAL IN ANJANEYA BRICK WORKS VS. CIT (SUPRA), WHEREIN IT HAS BEEN HELD THAT MERE EXISTENCE OF EVIDENCE OF CONCEALMENT IN THE NEXT ASSESSMENT YEAR COULD NOT BE THE BASIS FOR ESTIMATING INCOME IN ANY OTHER ASSESSMENT YEARS. 82. FURTHER, BEFORE THE HONBLE DELHI HIGH COURT IN CIT VS. ANA ND KUMAR DEEPAK KUMAR (SUPRA), THE ISSUE WAS IN RELATION TO THE EVIDENCE FOUND OF UNACCOUNTED SALES FOR PART OF THE PERIOD DURING THE COURSE OF SEARCH. THE ASSESSING OFFICER ON THE SAID BASIS ASSUMED UNACCOUNTED SALES DURING THE ENTIRE YEAR, WHICH WAS DEL ETED BY THE CIT(A) AND THE TRIBUNAL. THE HONBLE DELHI HIGH COURT OBSERVED THAT ASSUMPTION OF ASSESSING OFFICER MAY HAVE PERHAPS BEEN VALID IF THE SEARCH HAD BEEN CONDUCTED AFTER THE ACCOUNTING YEAR AND THE BOOKS OF ACCOUNT HAD BROUGHT SOME DISCREPANCY. 83. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. C.J. SHAH AND CO. (SUPRA). 84. FURTHER, THE BILASPUR BENCH OF THE TRIBUNAL IN CHATTISGARH STEEL CASTING PVT. LTD. V. ACIT (SUPRA) DECIDED SIMILAR ISSUE OF THE INFOR MATION AVAILABLE WITH THE CENTRAL EXCISE DEPARTMENT, WHEREIN UNACCOUNTED SALES WAS ESTIMATED FOR 56 DAYS AND THE ASSESSING OFFICER ESTIMATED THE SALES FOR THE REMAINING PERIOD. THE ADDITION WAS DELETED IN THE HANDS OF THE ASSESSEE AND WAS RESTRICTED TO TH E INCOME DECLARED BY THE ASSESSEE ON THE BASIS OF PAPERS SEIZED, FOR WHICH THE ASSESSEE HAD FILED A PETITION BEFORE THE SETTLEMENT COMMISSION AND INCOME ON THAT ACCOUNT WAS DECLARED BY THE ASSESSEE. THE TRIBUNAL HELD THAT NO FURTHER ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE FOR THE BALANCE PERIOD. THE TRIBUNAL FURTHER HELD THAT HYPOTHETICAL CALCULATION OF TURNOVER AND ESTIMATION OF GROSS PROFIT MERELY HELD THAT HYPOTHETICAL CALCULATION OF TURNOVER AND ESTIMATION OF GROSS PROFIT MERELY ON GUESS WORK AND PRESUMPTION WAS NOT SUSTAINABLE IN LAW. NO DETAILS WERE AVAILABLE TO THE ASS ESSING OFFICER TO ARRIVE AT SUCH FIGURE OR HAD THERE BEEN ANY CONCEALED SALES FOR 9 MONTHS, IT COULD HAVE BEEN DETECTED BY THE CENTRAL EXCISE AUTHORITY DURING THEIR SEARCH OPERATIONS. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER IS PURELY BASED O N GUESS WORK, PRESUMPTION AND SURMISES AND NOT ON THE BASIS OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION CARRIED OUT BY THE CENTRAL EXCISE AUTHORITIES. SUCH ADDITION BASED ON HYPOTHETICAL CALCULATION OF TURNOVER AND ESTIMATION OF GP ON PRES UMPTION AND SURMISES WERE NOT SUSTAINABLE. THE TRIBUNAL DISTINGUISHED THE RATIO LAID DOWN IN CST VS. H.M. ESUFALI H.M. ABDULALI (SUPRA). THE LD. SPECIAL AR RELIED ON THE SAID DECISION AND IN VIEW OF THE DECISION OF COORDINATE BENCH ON SIMILAR ISSUE AS BE FORE US, WE FIND NO MERIT IN THE RELIANCE PLACED UPON BY THE LD. SPECIAL AR. 85. THE LD. SPECIAL AR DURING THE COURSE OF ARGUMENTS BEFORE THE TRIBUNAL IN MISCELLANEOUS APPLICATION FILED IN M/S. SRJ PEETY STEELS PVT. LTD. VIDE MA NO.17/PN/2015 HAD RAISED THE ISSUE OF EXTRAPOLATION OF SALES FOR 300 DAYS IN VIEW OF THE ASSESSEE HAVING ADMITTED TO CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY AND THEREAFTER, FILING A PETITION BEFORE THE SETTLEMENT COMMISSION. 86. THE PLEA OF THE REVENUE RAISED IN THE MISCELLANEOUS APPLICATION WAS REJECTED AS NO SUCH PLEA WAS TAKEN BY THE DEPARTMENT DURING THE APPELLATE PROCEEDINGS BEFORE THE TRIBUNAL AND WAS RAISED FOR THE FIRST TIME IN THE MISCELLANEOUS APPLICATION. HOWEVER, IN THE INTEREST OF JUSTICE, THE SAID ISSUE OF EXTRAPOLATION OF SUPPRESSED SALES WAS ADJUDICATED BY THE TRIBUNAL BY OBSERVING AS UNDER: - 41. BEFORE CLOSING THE ISSUE, IN THE INTEREST OF JUSTICE, WE WOULD LIKE TO ADJUDICATE THE ISSUE OF EXTRAPOLATION OF SUPPRESSED SALES ON ACCOUNT OF SETTLEMENT PETITION MADE BY THE ASSESSEE. ADMITTEDLY, DURING THE COURSE OF 46 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) SEARCH AND SEIZURE OPERATION ON CERTAIN BROKERS, EVIDENCES OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, WAS FOUND AGAINST THE ASSESSEE. HOWEVER, NO SEARCH A ND SEIZURE OPERATION WAS CARRIED OUT AGAINST THE ASSESSEE, BUT THE ASSESSEE CLAIMS THAT IN ORDER TO BUY PEACE OF AGAINST THE ASSESSEE, BUT THE ASSESSEE CLAIMS THAT IN ORDER TO BUY PEACE OF MIND, IT HAD DECLARED THE SAID AMOUNT BY WAY OF PETITION BEFORE THE SETTLEMENT COMMISSION. THE SAID OFFER MADE BY THE ASSESSEE WAS ACCEPTED IN TOTO. IT MAY BE NOTED THAT THE EXCISE AUTHORITIES HAVE THE POWER TO RE - VISIT THE OFFER MADE BY THE ASSESSEE, IN CASE, ANY ADVERSE MATERIAL IS AVAILABLE AGAINST THE PERSON MAKING THE OFFER. IT MAY ALSO BE NOTED THAT THE SETTLEMENT ACCEPTED IN THE HANDS O F THE ASSESSEE IS FOR THE FINANCIAL YEAR AND IS NOT RESTRICTED TO THE NUMBER OF DAYS FOR WHICH IT HAS OFFERED. IN OTHER WORDS, ONCE A PERSON MAKES A SETTLEMENT PETITION FOR A PARTICULAR YEAR ON ACCOUNT OF THE EVIDENCE FOUND FOR PART OF THE PERIOD AND ONCE THE PETITION IS ACCEPTED IN THE HANDS OF THE ASSESSEE, NO FURTHER ADDITION CAN BE MADE ON ACCOUNT OF ALLEGED CLANDESTINE REMOVAL OF GOODS OR SUPPRESSED SALES, IN THE ABSENCE OF EVIDENCE FOR THE BALANCE PERIOD. THE ABOVE SAID RATIOS HAVE BEEN LAID DOWN IN CHATTISGARH STEEL CASTING PVT. LTD. V. ACIT (SUPRA), HONBLE BOMBAY HIGH COURT IN CIT VS. C.J. SHAH & CO. (SUPRA), HONBLE HONBLE BOMBAY HIGH COURT IN CIT VS. C.J. SHAH & CO. (SUPRA), HONBLE DELHI HIGH COURT IN CIT VS. ANAND KUMAR DEEPAK KUMAR (SUPRA). THE LD. SPECIAL AR HAD PLACED RELIANCE ON THE DECISION OF HONBLE BOM BAY HIGH COURT IN CIT VS. DR.M.K.E. MEMON (SUPRA) WHILE ARGUING THE ISSUE NO.2 I.E. ESTIMATION OF SUPPRESSED PRODUCTION IS MIS - PLACED. THE HONBLE BOMBAY HIGH COURT IN THE SAID DECISION CONSIDERED THE SCOPE OF ASSESSMENT UNDER CHAPTER XIV - B AND HELD THAT WHAT IS TO BE ASSESSED UNDER THE SAID CHAPTER IS UNDISCLOSED INCOME OF THE BLOCK PERIOD AND NOT THE TOTAL INCOME OR LOSS OF THE PREVIOUS YEAR REQUIRED TO BE ASSESSED UNDER REGULAR ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THE HONBLE BOMBAY HIGH COURT H ELD THAT SUCH REGULAR ASSESSMENT STANDS ON A DIFFERENT FOOTING IN CONTRAST TO THE EXERCISE UNDERTAKEN BY THE ASSESSING OFFICER UNDER CHAPTER XIV - B, WHERE THE ASSESSING OFFICER HAD TO ASSESS ONLY THE UNDISCLOSED INCOME. HOWEVER, THE HONBLE BOMBAY HIGH COU RT FURTHER HELD THAT UNDER CHAPTER XIV - B, THE HONBLE BOMBAY HIGH COU RT FURTHER HELD THAT UNDER CHAPTER XIV - B, THE ASSESSING OFFICER CANNOT ESTIMATE THE UNDISCLOSED INCOME ON AN ARBITRARY BASIS. WE FIND NO MERIT IN THE PLEA RAISED BY THE LD. SPECIAL AR IN THIS REGARD AS THE FACTS OF THE SAID CASE ARE DIFFERENT FROM THE FAC TS OF THE PRESENT CASE. 42. EVEN ON MERITS, THE REVENUE HAS NO CASE AGAINST THE ASSESSEE. THE RELIANCE PLACED UPON BY THE LD. SPECIAL AR ON THE RATIO LAID DOWN IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2006 - 07 IS MISPLACED AS THE ADDITION IN T HE HANDS OF THE ASSESSEE IN THAT YEAR WAS MADE ON ACCOUNT OF SEARCH AND SEIZURE OPERATIONS CARRIED OUT BY THE INCOME - TAX DEPARTMENT, WHEREIN SALES OUTSIDE BOOKS WERE FOUND FOR FEW DAYS. HOWEVER, NO INDEPENDENT INVESTIGATION / INQUIRY BY THE INCOME - TAX DEP ARTMENT HAS BEEN INDEPENDENT INVESTIGATION / INQUIRY BY THE INCOME - TAX DEP ARTMENT HAS BEEN MADE BEFORE COMPLETING ASSESSMENT PROCEEDINGS AGAINST THE ASSESSEE. ANOTHER ASPECT OF THE ISSUE IS THAT THE PETITION BEFORE THE SETTLEMENT COMMISSION HAS BEEN MADE BY THE ASSESSEE IN ASSESSMENT YEAR 2007 - 08 ONLY AND NO SUCH PETITION FOR C LANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY HAS BEEN MADE FOR ASSESSMENT YEAR 2008 - 09. THE ASSESSEE HAD OFFERED THE ADDITIONAL INCOME ON ACCOUNT OF SUCH CLANDESTINE REMOVAL OF GOODS BEFORE THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2007 - 0 8 AND THE SAME WAS THE REASON FOR REOPENING THE ASSESSMENT UNDER SECTION 148 OF THE ACT. ONCE A PARTICULAR FACT WAS AVAILABLE WITH THE ASSESSING OFFICER, WHICH WAS TAKEN NOTE OF AND CONSIDERED BY HIM DURING THE ASSESSMENT PROCEEDINGS, BUT THE ADDITION HAV ING BEEN MADE ON ONLY ON THE ISSUE OF ERRATIC CONSUMPTION OF ELECTRICITY, WHICH IS THE BASIS OF ORDER PASSED BY CCE, AURANGABAD, WHO WAS ALSO IN KNOWLEDGE OF THE CLANDESTINE REMOVAL OF MATERIAL AND THE INVESTIGATION CARRIED OUT BY THE DGCEI AND THE REMOVAL OF MATERIAL AND THE INVESTIGATION CARRIED OUT BY THE DGCEI AND THE PETITIO N BEFORE THE SETTLEMENT COMMISSION, EVEN THE THIRD MEMBER OF CESTAT WAS AWARE OF ALL THESE PROCEEDINGS, BUT SINCE THE SETTLEMENT PETITION FILED BY THE ASSESSEE HAD BEEN ACCEPTED IN TOTO BY THE SETTLEMENT 47 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) COMMISSION, NO FURTHER ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE ON THIS GROUND, IN THE ABSENCE OF ANY INQUIRY OR INVESTIGATION BY THE ASSESSING OFFICER. ACCORDINGLY, THE RELIANCE PLACED UPON BY THE LD. SPECIAL AR IN ASSESSEES OWN CASE REPORTED IN 137 TTJ 627 [PUNE] IS MIS - PLACED AND THERE IS NO MERIT IN THE ARGUMENTS OF THE LD. SPECIAL AR IN THIS REGARD. 87. ANOTHER PLEA RAISED BY THE LD. SPECIAL AR WAS THAT INCOME COULD BE ESTIMATED/ TAXED ON THE THEORY OF PREPONDERANCE, IN TURN RELYING ON THE RATIO LAID DOWN BY THE APEX COURT IN SUMATI DAYAL VS. CIT (SUPRA) AND COLLECTOR OF CUSTOMS MADRAS AND OTHERS VS. D. BHOORMULL (SUPRA), WHICH WAS ALSO RELIED UPON BY THE LD. SPECIAL AR IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) AND THE SAME HAD BEEN CONSIDERED BY THE TRIBUNAL. DURING THE COURSE OF HEARING, THE LD. SPECIAL AR RELIED ON SERIES OF OTHER DECISIONS, BUT THE RATIOS LAID DOWN BY THE SAID JUDGMENTS ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IT MAY BE PUT ON RECORD THAT ALL THESE DECISIONS WERE RELIED UPON BY THE LD. SPECIAL AR IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) AND SAME HAVE ALREADY BEEN CONSIDERED. 88. IN THE ENTIRETY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE HOLD THAT NO EXTRAPOLATION OF SALES FOR 300 DAYS CAN BE MADE IN THE HANDS OF THE ASSE SSEE ON THE BASIS OF THE EVIDENCE FOUND FOR CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY FOR FEW DAYS, WHICH IN TURN, HAS BEEN ADMITTED BY THE ASSESSEE BY WAY OF FILING PETITION BEFORE THE SETTLEMENT COMMISSION, WHICH IN TURN, HAS ALSO BE EN ACCEPTED BY THE SETTLEMENT COMMISSION. MERELY BECAUSE THE SETTLEMENT COMMISSION ACCEPTED THE CLAIM OF THE ASSESSEE OF ADDITIONAL EXCISE DUTY PAYABLE ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY DOES NOT ESTABLISH THE CASE OF THE REVENUE THAT THE SAID FIGURES OF ADDITIONAL PRODUCTION SHOULD BE UTILIZED FOR EXTRAPOLATING THE SALES IN THE HANDS OF THE ASSESSEE FOR THE ENTIRE YEAR. ADMITTEDLY, THE ASSESSEE HAD OFFERED ADDITIONAL INCOME ON THE SAID CLANDESTINE REMOVAL OF MATERI AL WITHOUT PAYMENT OF EXCISE DUTY, WHICH IS TO BE CLANDESTINE REMOVAL OF MATERI AL WITHOUT PAYMENT OF EXCISE DUTY, WHICH IS TO BE ADDED AS INCOME IN THE HANDS OF THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT IN CASE THE SAID ADDITIONAL INCOME HAS NOT BEEN ADDED WHILE COMPUTING THE INCOME IN THE HANDS OF THE ASSESSEE FOR THE RESPECTIVE YEARS, THE SAME MAY BE DIRECTED TO BE ADDED IN THE HANDS OF THE RESPECTIVE ASSESSEE IN RESPECTIVE YEARS. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AND INC LUDE THE ADDITIONAL INCOME ON ACCOUNT OF SUCH ADMITTED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, BY THE ASSESSEE EITHER BEFORE THE SETTLEMENT COMMISSION OR BEFORE THE EXCISE AUTHORITIES, IN THE HANDS OF THE ASSESSEE. WE HAVE HEARD BU NCH OF APPEALS AND IN SOME YEARS, THERE IS NO ADMISSION OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY AND IN THOSE YEARS IN THE ABSENCE OF ANY EVIDENCE AND / OR ANY INVESTIGATION OR INQUIRY MADE BY THE ASSESSING OFFICER AND WHERE THE AS SESSING OFFICER HAS FAILED TO COLLECT ADDITIONAL EVIDENCE, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE, BY WAY OF EXTRAPOLATION OF SALES FOR 300 DAYS ON ACCOUNT OF ANY EVIDENCE FOUND IN ANY PRECEDING OR SUCCEEDING YEARS. FURTHER, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE, WHERE NO PETITION HAS BEEN FILED BY THE ASSESSEE BEFORE THE SETTLEMENT COMMISSION IN ANY OF THE RESPECTIVE YEARS OR BEFORE THE EXCISE AUTHORITIES. 89. SINCE WE HAVE DELETED THE ADDITION IN THE HANDS OF ASSESSEE ON BOT H ACCOUNTS I.E. ADDITION MADE ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY AND ADDITION PROPOSED ON THE BASIS OF EVIDENCE FOUND FOR THE PART OF THE YEAR OF CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, NEXT ADDITION MADE IN THE HANDS OF THE ASSESSEE I.E. ALLEGED INVESTMENT IN THE PURCHASES FOR EFFECTING SUCH SALES WHICH GOODS HAVE BEEN CLANDESTINELY REMOVED, IS NOT SUSTAINABLE. ACCORDINGLY, WE HOLD THAT NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF ALLEGED INVESTM ENT IN PURCHASES UNDER SECTION 69C OF THE ACT. 48 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 2 4 . THEREAFTER, CORRIGENDUM ORDER WAS PASSED BY THE TRIBUNAL SUBSTITUTING PARA 88 OF THE TRIBUNAL AND IT WAS HELD AS UNDER: - 3. ON PERUSAL OF THE RECORD, WE FIND THAT BY AN ERROR, THE FINDINGS OF THE TRIB UNAL IN PARA 88 WITH SPECIAL REFERENCE TO FROM LINE 17 TO 22, NEEDS CORRECTION TO THE EXTENT THAT THE ADDITIONAL INCOME TO BE ADDED IN THE HANDS OF THE ASSESSEE IS EQUIVALENT TO PROFITS ON SUPPRESSED PRODUCTION @ 4% OR ACTUAL GP RATE DECLARED BY THE ASSESS EE WHICHEVER WAS HIGHER. IN VIEW THEREOF, WE PASS THIS CORRIGENDUM ORDER AND THE PARA 88 I.E. FROM LINE 17 TO 22 WOULD NOW BE SUBSTITUTED BY FOLLOWING PARA. 88. ADMITTEDLY, THE ASSESSEE HAD OFFERED ADDITIONAL INCOME ON THE SAID CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, WHICH IS TO BE ADDED AS INCOME IN THE HANDS OF THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT IN CASE THE SAID ADDITIONAL INCOME HAS NOT BEEN ADDED WHILE COMPUTING THE IN COME IN THE HANDS OF THE ASSESSEE FOR THE RESPECTIVE YEARS, THE SAME MAY BE DIRECTED TO BE ADDED IN THE HANDS OF THE RESPECTIVE ASSESSEE IN RESPECTIVE YEARS. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AND INCLUDE THE ADDITIONAL INCOME ON ACCOUNT OF SUCH ADMITTED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, BY THE ASSESSEE EITHER BEFORE THE SETTLEMENT COMMISSION OR BEFORE THE EXCISE AUTHORITIES, IN THE HANDS OF THE ASSESSEE. ACCORDING LY, WE DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AND INCLUDE IN THE HANDS OF ASSESSEE, THE ADDITIONAL INCOME @ 4% OR ACTUAL G.P. RATE DECLARED BY THE ASSESSEE FOR THAT INCOME @ 4% OR ACTUAL G.P. RATE DECLARED BY THE ASSESSEE FOR THAT YEAR, WHICHEVER IS HIGHER, ON VALUE OF SUCH ADMIT TED CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, BY THE ASSESSEE BEFORE THE EXCISE AUTHORITIES. THUS, THE ASSESSEE IS DIRECTED TO FILE THE REQUISITE DETAILS OF PROCEEDINGS BEFORE THE EXCISE AUTHORITIES, BEFORE THE ASSESSING OFFICER IN O RDER TO COMPUTE THE ADDITIONAL INCOME IN THE HANDS OF ASSESSEE IN THE RESPECTIVE YEARS. 2 5 . IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE KARTA, HUF HAD ADMITTED TO THE CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY AND HAD PAID ADDITIONAL EXCISE DUTY ON THE SAID AMOUNT. FURTHER, THE ASSESSEE HAD MOVED A PETITION BEFORE THE SETTLEMENT COMMISSION, WHICH WAS ALSO DISPOSED OFF AND PENALTY OF RS.25,000/ - WAS LEVIED. THE FACTS AND ISSUES ARISING IN THE PRESENT APPEAL ARE IDENTICAL TO THE FACTS AND ISSUE IN SHREE OM ROLLING MILLS PVT. LTD. VS. ADDL. CIT (SUPRA) AND FOLLOWING THE SAME PARITY O F REASONING, WE DIRECT THE ASSESSING OFFICER TO VERIFY FROM THE RECORDS FOR THE RESPECTIVE YEARS AND INCLUDE IN THE HANDS OF ASSESSEE, THE ADDITIONAL INCOME @ 4% OR ACTUAL G.P. RATE DECLARED BY THE ASSESSEE FOR THAT YEAR, WHICHEVER IS HIGHER, ON VALUE OF SUCH ADMITTED 49 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, BY THE ASSESSEE BEFORE THE EXCISE AUTHORITIES. THUS, THE ASSESSEE IS DIRECTED T O FILE THE REQUISITE DETAILS OF PROCEEDINGS BEFORE THE EXCISE AUTHORITIES, BEFORE THE ASSESSING OFFICER IN ORDER TO COMPUTE THE ADDITIONAL INCOME IN THE HANDS OF ASSESSEE IN THE RESPECTIVE YEARS. 2 6 . ANOTHER ASPECT IS TO BE SEEN THAT THE YEAR UNDER APPEAL I.E. ASSESSMENT YEAR 2007 - 08 IS FIRST YEAR IN WHICH THE ASSESSEE HAD ADMITTED TO CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY. FURTHER, THE ASSESSEE HAD ALSO ADMITTED THAT HE WAS THE DIRECTOR OF NILESH STEEL AND ALLOYS PVT. LTD. , FROM WHIC H IT HAD MADE CASH PURCHASES OF INGOTS FOR THE PURPOSE OF TMT BARS OR CTD BARS. THE ADMISSION OF ASSESSEE IN THIS REGARD WAS CASH EQUIVALENT TO 497 MT FOR THE VALUE OF RS. 73,84,150/ - . THE SAID AMOUNT WAS TREATED AS DEEMED INCOME OF THE ASSESSEE UNDER SEC TION 69C OF THE ACT. HOWEVER, NO ADDITION WAS MADE BY THE ASSESSING OFFICER SINCE IT WAS HELD THAT THE SAID AMOUNT SUBSUMED IN THE ADDITION ON ACCOUNT OF SUPPRESSED PRODUCTION. THE CIT(A) ON THE OTHER HAND, NOTED THE CONTENTION OF ASSESSEE IN PARA 8.6 AT PAGE 13 OF THE APPELLATE ORDER IN THIS REGARD, WHEREIN IT WAS CLAIMED THAT THE PURCHASE OF RAW MATERIAL AND SALE OF FINISHED GOODS WERE BOTH ON CREDIT AND AFTER RECEIPT OF SALE PROCEEDS, THIS PAYMENT WAS MADE TO THE SUPPLIERS OF RAW MATERIAL AND HENCE, NO ADDITION SHOULD BE MADE ON THIS ACCOUNT. THE CIT(A) NOTED THAT THE CONTENTION OF ASSESSEE THAT AFTER RECEIPT OF PROCEEDS OF SALE, THE SUPPLIERS OF RAW MATERIAL WERE PAID WERE NOT SUPPORTED BY EVIDENCE. FURTHER, IT WAS HELD THAT FOR PRODUCING THE GOODS, OTHER MANUFACTURING EXPENSES IN ADDITION TO RAW MATERIAL WERE ALSO REQUIRED TO BE INCURRED. IN VIEW THEREOF, THE SAID UNDISCLOSED INVESTMENT IN RESPECT OF UNDISCLOSED TURNOVER WAS ESTIMATED AT AVERAGE UNDISCLOSED TURNOVER OF HALF WEEK OF EARLIEST YEAR UND ER APPEAL. THE UNDISCLOSED SALE FOR THE EARLIEST YEAR UNDER APPEAL WAS 50 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) RS.9,42,37,718/ - AND THE INVESTMENT REQUIRED FOR THE PRODUCTION OUT OF BOOKS WORKED OUT TO RSS.9,06,132/ - , WHICH WAS ADDED IN THE HANDS OF ASSESSEE. 27. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE AND KEEPING IN MIND THE ADMISSION OF ASSESSEE BEFORE THE EXCISE AUTHORITIES THAT IT HAD MADE PURCHASES TO THE VALUE OF RS.73,84,150/ - FROM ITS OTHER CONCERN FOR UNACCOUNTED PRODUCTION, WE FIND MERIT IN THE CLAIM OF ASSESSEE THAT THE PAYMENTS WERE MADE TO THE SUPPLIERS OF RAW MATERIAL AFTER RECEIVING THE SALE RECEIPTS. THIS IS THE PLAUSIBLE EXPLANATION AND CAN BE ACCEPTED IN THE HANDS OF ASSESSEE SINCE THE ASSESSEE IS MAKING THE SAID PURCHASES OF INGOTS FROM ITS CON CERN ITSELF, WHICH WAS CONTROLLED AND RUN BY HIM. HOWEVER, IN RESPECT OF OTHER ITEMS REQUIRED FOR MANUFACTURING IN ADDITION TO RAW MATERIAL, WE FIND MERIT IN THE ORDER OF CIT(A) IN WORKING OUT THE ADDITION TO THE EXTENT OF RS. 9,06,132/ - AND THE SAME IS UP HELD. BUT NO SUCH SEPARATE ADDITION WAS MADE BY THE ASSESSING OFFICER SINCE THE ADDITION WAS MADE ON ACCOUNT OF UNACCOUNTED PRODUCTION. HOWEVER, THE CIT(A) HAD CONFIRMED ADDITION OF RS. 9,06,132/ - SEPARATELY AND THE SAME IS CONFIRMED. IN VIEW THEREOF, WE DIRECT THE ASSESSING OFFICER TO WORK OUT ADDITION IN THE HANDS OF ASSESSEE ON ACCOUNT OF SUPPRESSED PRODUCTION IN LINE WITH THE ADMISSION MADE BY THE ASSESSEE BEFORE THE EXCISE AUTHORITIES OF CLANDESTINE REMOVAL OF GOODS WITHOUT PAYMENT OF EXCISE DUTY BY APPLYING GP RATE @ 4% OR HIGHER, IF DECLARED BY ASSESSEE . WE ALSO UPHOLD THE ADDITION OF RS. 9,06,132/ - . THE OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE REGARDING CHARGING OF INTEREST UNDER SECTION 234A, 234B AND 234C OF THE ACT ARE CONSEQUENTIAL IN NA TURE AND HENCE, THE SAID GROUNDS OF APPEAL ARE DISMISSED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE PARTLY ALLOWED. 2 8 . NOW, COMING TO THE APPEAL FILED BY THE REVENUE IN ITA NO. 684 /PN/2012 . 51 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 2 9 . THE ISSUE IN THE PRESENT APPEAL IS AGAINST THE QU ANT IFICATION OF SUPPRESSED PRODUCTION AND APPLICATION OF NET PROFIT RATE OF 4% AND THE ADDITION UNDER SECTION 69C OF THE ACT BEING SUMMED UP WITH THE ISSUE OF SUPPRESSED PRODUCTION. THE GROUNDS OF APPEAL NO.1 TO 3 ARE LINKED WITH THE ISSUE DECIDED IN THE CAS E OF ASSESSEE AND FOLLOWING THE SAME RATIO, GROUNDS OF APPEAL ARE PARTLY ALLOWED. 30 . NOW, COMING TO THE CROSS APPEALS IN ITA NOS. 120/PN/2012 AND 685/PN/2012 , RELATING TO ASSESSMENT YEAR 2008 - 09 . 31 . IN THIS APPEAL, THE ASSESSEE HAS NOT PRESSED THE GROUN DS OF APPEAL NO.1 AND 2, WHICH ARE DISMISSED AS NOT PRESSED. 3 2. T HE ISSUE ARISING IN GROUNDS OF APPEAL NO.3 TO 8 ARE IDENTICAL TO THE ISSUE BEFORE US IN ASSESSMENT YEAR 2007 - 08 AGAINST THE ADDITION MADE ON ACCOUNT OF UNACCOUNTED PRODUCTION AND OUR DECISI ON IN ASSESSMENT YEAR 2008 - 09 SHALL APPLY MUTATIS MUTANDIS TO ITA NOS.120/PN/2012 AND 685/PN/2012. 3 3 . NOW, COMING TO THE APPEALS IN ITA NOS.1591/PN/2012 AND 1635/PN/2012 RELATING TO ASSESSMENT YEAR 2009 - 10 . 3 4 . THE LEARNED AUTHORIZED REPRESENTATIVE FO R THE ASSESSEE HAS NOT MADE ANY SUBMISSIONS WITH REGARD TO GROUND OF APPEAL NO.1, HENCE THE SAME IS DISMISSED A S NOT MAINTAINABLE. 3 5 . THE ISSUE IN GROUNDS OF APPEAL NO.2 TO 5 AND THE ISSUES RAISED BY THE REVENUE ARE IDENTICAL AND FOLLOWING SAME LINE OF R EASONING AS IN ASSESSMENT YEAR 2007 - 08 , OUR DECISION SHALL APPLY MUTATIS MUTANDIS TO THE APPEALS IN ASSESSMENT YEAR 2009 - 10. 52 ITA NOS. 1591 & 1635 /PN/201 2 & ORS SANJAYKUMAR RAMKRISHAN MANTRI (HUF) 3 6 . IN THE RESULT, ALL THE APPEALS OF ASSESSEE AND THE REVENUE ARE PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 31 ST DAY OF MARCH , 2 01 6 . SD/ - SD/ - ( PRADIP KUMAR KEDIA ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER PUNE ; DATED : 31 ST MARCH , 201 6 . /GCVSR / COPY OF THE O RDER IS FORWARDED TO : 1 ) THE ASSESSEE; 2 ) THE DEPARTMENT; 3 ) THE CIT(A) , AURANGABAD ; 4 ) THE CIT , AURANGABAD ; 5 ) THE DR A BENCH, I.T.A.T., PUNE; 6 ) GUARD FILE. / BY ORDER , //TRUE COPY// / SR. PRIVATE SECRETARY , / ITAT, PUNE