Income-tax Officer, V. M/s. Shivshakti Re-Rolling Mills Pvt. Ltd., Jalna

ITA 5/PUN/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2456 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 02-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Keywords: Rejection of books of accounts; Unexplained investment; Search and seizure; Additional evidence; Retraction
• Section: 69C; 143(3); 153A; 260A; 147; 145; 148; 132; 144

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. 1884 /PN/201 4 ASSESSMENT YEAR : 20 1 0 - 11 SHIVSHAKTI RE - ROLLING MILLS PVT. LTD., C - 57 TO 63, ADDITIONAL MIDC, AURANGABAD ROAD, JALNA 431 203. . APPELLANT PAN: AAICS1136J VS. THE INCOME TAX OFFICER , WARD 1 (3), JALNA . RESP ONDENT ITA NO. 2022 /PN/201 4 ASSESSMENT YEAR : 20 1 0 - 11 THE INCOME TAX OFFICER, WARD 1 (3), JALNA . APPELLANT VS. SHIVSHAKTI RE - ROLLING MILLS PVT. LTD., SHIVSHAKTI RE - ROLLING MILLS PVT. LTD., C - 57 TO 63, ADDITIONAL MIDC, AURANGABAD ROAD, JALNA 431 203. . RESPONDENT PAN: AAICS11 36J ITA NO. 05 /PN/201 5 ASSESSMENT YEAR : 201 1 - 1 2 THE INCOME TAX OFFICER, WARD 1 (3), JALNA . APPELLANT VS. SHIVSHAKTI RE - ROLLING MILLS PVT. LTD., C - 57 TO 63, ADDITIONAL MIDC, AURANGABAD ROAD, JALNA 431 203. . RESPONDENT PAN: AAICS1136J ASSESSEE BY : SHRI J.P. BAIRAGRA DEPARTMENT BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 16 . 0 3 .201 6 / DATE OF PRONOUNCEMENT: 31 . 0 3 .201 6 2 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ / ORDER PER SUSHMA CHOWLA, JM : OUT OF THIS BUNCH OF THREE APPEALS , CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE ARE AGAINST TH E ORDER OF THE CIT(A) , AURANGABAD , DATED 26.08.2014 RELATING TO ASSESSMENT YEAR 20 1 0 - 11 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE REVENUE IS ALSO IN APPEAL AGAINST THE ORDER OF THE CIT(A) , AURANGAB AD , DATED 28. 1 0.201 4 RELATING TO ASSESSMENT YEAR 20 11 - 1 2 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE ACT. 2. ALL THE 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 IN ITA NO. 1884 /PN/201 4 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1 . THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE ALLEGED SUPPRE SSION OF PRODUCTION OF RS.1,65,53,281/ - . 2 . THE LEARNED CIT (APPEALS) FURTHER ERRED IN CONFIRMING THE ALLEGED SUPPRESSION OF PRODUCTION MERELY ON BASIS OF THE SHOW CAUSE NOTICE RECEIVED FROM CENTRAL EXCISE AND CUSTOMS, AURANGABAD FOR A.Y. 2008 - 09 AND A.Y. 2009 - 10 AND ORDER OF CUSTOMS, EXCISE AND SERVICE TAX TRIBUNAL, WEST ZONAL, MUMBAI DATED 01 - 03 - 2011. 3 . THE LEARNED CIT (APPEALS) FURTHER ERRED IN CONFIRMING THE ALLEGED SUPPRESSION OF SALES MERELY ON THE BASIS OF ACTION OF DIRECTORATE GENERAL OF CENTRAL EXCISE AND CUSTOMS, FOR WHICH THE ASSESSEE HAD PAID ALL TAXES DURING THE ASSESS MENT OF INCOME FOR ASSESSMENT YEAR 2007 - 08. 4 . THE LEARNED CIT (APPEALS) FURTHER ERRED IN CONFIRMING THE ALLEGED SUPPRESSION OF PRODUCTION MERELY ON BASIS OF MONTHLY VARIATIONS IN CONSUMPTION OF ELECTRICITY VIS A VIS PRODUCTION. 5 . THE LEARNED CIT (APPEALS) FURTHER ERRED IN CONFIRMING SUPPRESSION OF SALES OF RS.1,65,53,281/ - ON THE BASIS OF THE SHOW CAUSE NOTICE RECEIVED FROM CENTRAL EXCISE AND CUSTOMS, AURANGABAD WHEREIN THEY HAVE RELIED ON THE CONSUMPTION OF ELECTRICITY VIS - A - VIS PRODUCTION ON THE 3 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ BASIS OF AN ARTICLE WRITTEN BY DR. N. K. BATRA, PROFESSOR OF IIT, KANPUR I.E. ON PRESUMPTION AND ASSUMPTION AND WITHOUT ANY EVIDENCE OF PURCHASE OF RAW MATERIAL OR SALES OF FINISHED PRODUCTS OUT OF BOOKS. 6 . THE LEARNED CIT (APPEALS) FURTHER ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN HOLDING THAT THE BOOKS OF ACCOUNTS OF THE APPELLANT COMPANY ARE CORRECTLY REJECTED U/S. 145 OF THE INCOME TAX ACT, 1961 WITHOUT ANY EVIDENCE OR FINDING AS TO HOW THE PROVISIONS OF SECTION 145(3) ARE SATISFIED. 7 . THE LE ARNED CIT(APPEALS) FURTHER ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF GROSS PROFIT @ 4% OF RS.52,80,874/ - ON THE ALLEGED SUPPRESSION OF SALE OF RS.1,65,53,281/ - . 8 . THE LEARNED CIT(APPEALS) FURTHER ERRED IN NOT FOLLOWING THE ORDER OF THE HON. INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF M/S. SRJ PEETY STEELS PVT. LTD. FOR ASSESSMENT YEARS 2000 - 01 TO 2006 - 07 REPORTED IN 137 TTJ (PUNE) 627, WHEREIN THE SIMILAR ADDITION WAS DELETED. 137 TTJ (PUNE) 627, WHEREIN THE SIMILAR ADDITION WAS DELETED. 9 . THE APPELLANT CRAVES TO ADD TO, ALTER OR AMEND THE FOREGOING GROUNDS WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER, AT THE TIME OF HEARING. 4. THE REVENUE IN ITA NO.2022/PN/2014 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) WAS JUSTIFIED IN QUANTIFYING THE SUPPRES SED PRODUCTION @ 4% EVEN AFTER ACCEPTING THE FACT THAT THE ASSESSEE INDULGED IN CLANDESTINE REMOVAL OF GOODS WITHOUT 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 M ANUFACTURING 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 THE CASE WHETHER THE CIT(A) WAS J USTIFIED IN NOT APPRECIATING THE FACT THAT THE WORKING CAPITAL IS REQUIRED FOR PURCHASE OF RAW MATERIAL AND DAY TO DAY ACTIVITIES FOR PRODUCTION OF GOODS EVERY YEAR. 4 . THE ORDER OF THE AO BE RESTORED AND THAT OF THE CIT(A) BE VACATED 4 . THE ORDER OF THE AO BE RESTORED AND THAT OF THE CIT(A) BE VACATED 5. THE REVENUE IN I TA NO. 05 /PN/201 5 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - (1) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF SUPPRESSED PRODUCTION AT R S .1 , 58,11,901 / - RELYING ON THE DECISION RENDERED BY H ON'BLE C E & S TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH, MUMBAI WHICH HAS NEVER REACHED TO FINALITY AND STILL PREMATURE? 4 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ (2) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSESSEE HAS CORRECTLY POINTED OUT THAT VARIATION OF ELECTRICITY IS ON ACCOUNT OF USE OF DIFFERENT QUALITY OF RAW MATERIAL AND IRREGULAR SUPPLY OF POWER WHEN IN FACT THERE IS NO USE OF DIFFERENT QUALITY OF RAW MATERIAL AND EXPRESS FEEDER IS AVAILABLE WITH THE ASSESSEE WHICH PROVIDES POW ER WITHOUT ANY INTERRUPTION? (3) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THE CORRECT FACTS OF THE CASE IN RESPECT OF DETERMINATION OF ELECTRICITY CONSUMPTION AND GRANTED THE RELIEF ON WRONG APPRECIATION OF FACTS? (4) THE ORDER OF THE AO BE RESTORED AND THAT OF THE CIT(A) BE VACATED. 6. THE ASSESSEE AND THE REVENUE ARE IN CROSS APPEALS BEFORE US RELATING TO ASSESSMENT YEAR 2010 - 11 AND THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) RELATING TO AS SESSMENT YEAR 2011 - 12. 7. THE ISSUE ARISING IN ALL THESE THREE APPEALS IS SIMILAR AND WE PROCEED TO DECIDE THE PRESENT APPEALS AFTER REFERRING TO THE FACTS IN ITA NO.1884/PN/2014 I.E. APPEAL FILED BY THE ASSESSEE AND ITA NO.2022/PN/2014 I.E. APPEAL FILED BY THE REVENUE. 8. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEAL, BUT THE SAME ARE AGAINST ADDITION MADE ON ACCOUNT OF ALLEGED SUPPRESSION OF PRODUCTION AT RS. 1,65,53,281/ - ON THE BASIS OF SHOW CAUSE NOTICE RECEIVED FROM CENTRAL EXCISE AND CUST OMS, AURANGABAD FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 . 9. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ISSUE IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN CROSS APPEALS FILED BY THE ASSESSEE ITSELF IN ASSESSMENT YEARS 2 006 - 07 AND 2007 - 08 IN ITA NOS. 140 & 141/PN/2012 I.E. APPEALS FILED BY THE ASSESSEE AND ITA NOS.629 & 630/PN/2012 I.E. APPEALS FILED BY THE REVENUE IN CONSOLIDATED ORDER WITH LEAD ORDER IN SHREE OM ROLLING MILLS PVT. LTD. VS. ADDL. CIT IN ITA NOS.125 & 127/ PN/2012 , RELATING TO ASSESSMENT YEAR S 2007 - 08 & 2008 - 09 I.E. APPEALS FILED BY THE ASSESSEE AND ITA 5 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ NOS.430 & 431/PN/2012 , RELATING TO ASSESSMENT YEARS 2007 - 08 & 2008 - 09 I.E. APPEALS FILED BY THE REVENUE, THE TRIBUNAL HAD DECIDED THE SIMILAR ISSUE VIDE CONS OLIDATED ORDER DATED 15.07.2015 AND THEREAFTER, PASSED CORRIGENDUM ORDER DATED 17.02.2016. 10. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF MS TMT BARS AND MAJOR RAW MATERIAL REQUIRED WAS MS B ILLETS. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 18,94,500/ - . THE CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY. THE ASSESSING OFFICER PREPARED DETAILED CHART OF MONTHLY ELECTRICITY CONSUMPTION, PR ODUCTION OF TMT BARS AND MS MELTING SCRAP, WHICH IS ANNEXED WITH THE ASSESSMENT ORDER AS ANNEXURE A. AS PER THE SAID CHART, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT MINIMUM ELECTRICITY UNIT CONS UMPTION PER MT OF PRODUCTION CAME TO 192 UNITS AND MAX IMUM CAME TO 413 UNITS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THERE WAS ABNORMAL DEVIATION IN ELECTRICITY UNIT CONSUMPTION PER MT I.E. UP TO 221 UNITS PER MT, WHICH INDICATED THAT IN THE BOOKS OF ACCOUNT OF ASSESSEE, THE PRODUCTION WAS NOT DISCLOSED CORRECTLY . FURTHER, THE ASSESSING OFFICER TOOK NOTE OF THE INFORMATION RECEIVED FROM CENTRAL EXCISE AND CUSTOMS DEPARTMENT IN ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 , ON THE BASIS OF WHICH, THE PRODUCTION IN THE CASE OF ASSESSEE WAS ESTIMATED. THE ASSESSEE WAS THUS, ASKED TO EXPLAIN AS TO WHY DURING THE YEAR UNDER CONSIDERATION ALSO THE PRODUCTION SHOULD NOT BE ESTIMATED ON THE BASIS OF ELECTRICITY UNIT CONSUMPTION @ 188 UNITS PER MT. IN RESPONSE, THE ASSESSEE CONTENDED THAT THEY HAD ALREADY FURNISHED THEIR EXPLANATION IN THE EARLIER ASSESSMENT YEAR WHICH MAY BE CONSIDERED. THE ASSESSING OFFICER FURTHER CONSIDERING THE SAID INFORMATION AND AFTER GOING THROUGH VARIOUS EVIDENCES RELIED UPON BY THE ASSESSING OFFICER IN THE EARLIER YEARS AND INFORMATION COLLECT ED BY THE DGCEI AND THE STATEMENTS RECORDED ON 12.01.2007 BY THE DGCEI AND THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE IN 6 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ THE EARLIER YEARS, THE BOOKS OF ACCOUNT OF ASSESSEE WERE REJECTED AND THE SUPPRESSED PRODUCTION WAS ESTIMATED ON THE BASIS OF ADOPTI ON OF CONSUMPTION OF 188 KWH/MT TO BE AT 26787 MT. SINCE ALL THE MANUFACTURING AND ADMINISTRATIVE EXPENSES INCLUDING ELECTRICITY CHARGES HAD ALREADY BEEN PAID, THE ASSESSING OFFICER ALLOWED DEDUCTION TO THE ASSESSEE COMPANY ONLY TO THE EXTENT OF COST OF R AW MATERIAL USED FOR PRODUCTION WHICH WORKED OUT TO 22707 PER MT. THE ASSESSING OFFICER FURTHER NOTED THAT AVERAGE SALE PRICE OF COMMODITY MANUFACTURED AND SOLD BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WORKED OUT TO RS. 25 , 963 / - PER MT AND HENCE EXCESS SALE PRICE OVER AND ABOVE THE COST WAS HELD TO BE NET GAIN TO THE ASSESSEE ON ESTIMATED UNACCOUNTED PRODUCTION, WHICH WORKED OUT TO RS.3,256/ - PER MT AGGREGATING TO RS.1,65,53,281/ - WHICH WAS HELD TO BE THE INCOME OF ASSESSEE ON ACCOUNT OF SUPPRES SED PRODUCTION. FURTHER, ADDITION WAS MADE ON ACCOUNT OF WORKING CAPITAL UTILIZED FOR THE ABOVE SAID SUPPRESSED PRODUCTION UNDER SECTION 69C OF THE ACT AT RS. 43,46,955/ - . 11. THE CIT(A) WITH REGARD TO ADDITION MADE ON ACCOUNT OF SUPPRESSED PRODUCTION / S ALES OF TMT BARS ON THE BASIS OF ELECTRICITY UNIT CONSUMPTION 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 THE A.O. MENTIONED IN PARA - 5 ABOVE. ON P ERUSAL OF THE SAME, IT HAS BEEN OBSERVED AS 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 BARS AS IS EVIDENT FROM THE INVESTIGATIO N 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 CUS TOMS 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. (3) THE A.O. HAS REASONABLY ESTIMATED, AFTER CONSIDERING VARIOUS REPORTS AND STUDIES I N - RESPECT OF ELECTRICITY CONSUMPTION REQUIRED FOR PRODUCING TMT BARS , AT 188 ELECTRICITY UNITS PER METRIC TON . 188 ELECTRICITY UNITS PER METRIC TON . 7 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ (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. THE CONSUMPTION REQUIRED FOR THE QUANTUM OF GOODS PRODUCED, WHICH IS ABNORMAL. THE A.O. HAS ALSO NOTED SUBSTANTIAL VARIATION IN YIELD AND SHORTAGES DURING VARIOUS MONTHS IN THE YEARS UNDER APPEAL. ( 5) THE DECISION IN THE CASE OF ACIT VS, SRJ PEET Y 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 GO ODS 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 FACTS BROUGHT ON RECORD BY THE A .O . IN THE ASSE SSMENT 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 ADDITION IN RESPECT OF COMPLETED ASSESSMENTS IN SUCH CASES COULD BE MADE ONLY ON THE BASIS O F MATERIAL 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 DECISIONS 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 ESTIMATING THE PRODUCTION ON THE BASIS OF ELECTRICITY UN ITS CONSUMED WERE NOT PRESENT IN THE SAID CASES. (6) THE APPELLANT HAS NOT MAINTAINED INFORMATION IN FORM NO.G - 7, WHICH IS COMPULSORY, SHOWING DAILY CONSUMPTION OF POWER IN UNITS. (7) THE FACTS OF THE DECISIONS RELIED ON BY THE APPELLANT ARE DIFFERENT AN D RATIO LAID DOWN BY THE SAID DECISIONS IN THE CASE OF ACIT VS. SRJ PEETY STEELS PVT. LTD. / LAID DOWN BY THE SAID DECISIONS IN THE CASE OF ACIT VS. SRJ PEETY STEELS PVT. LTD. / SHREE OM ROLLING MILLS PVT. LTD. (2011) 137 TTJ 627 (PUNE) IN RESPECT OF GROSS PROFIT ADDITION CAN ONLY BE APPLIED WITH SOME ALTERATION CONSIDERING THE FACT OF THE CASE OF THE APPELLANT. (8) THE VARIOUS MANUFACTURERS OF TMT BARS HAVE FILED PETITION FOR STAY OF RECOVERY OF EXCISE ON ALLEGED UNDISCLOSED PRODUCTION SOLD BEFORE HONBLE CESTAT. THE HONBLE APPELLATE TRIBUNAL, WEST ZONAL BENCH HAS PASSED ORDER DATED 01/ 03/2011 ON THE SAID STAY PETITION. IN THIS ORDER, THE HONBLE APPELLATE TRIBUNAL HAS OBSERVED THAT THE FACTS OF THE CASE INCLUDING R.A. CASTINGS RELIED ON BY THE APPLICANTS CANNOT BE FOLLOWED AS PRECEDENT AS IN THE SAID CASE NO CORROBORATIVE EVIDENCE WAS FOUND BY THE BENCH. THE HONBLE APPELLATE TRIBUNAL HAS FURTHER OBSERVED THAT THE CRUCIAL EVIDENTIARY FINDINGS HAVE BEEN NOTED IN THE CASES OF THE APPLICANTS INCLUDING THE APPELLANT. THE SAID FINDINGS IN THE CASE OF SRJ PEETY APPLICANTS INCLUDING THE APPELLANT. THE SAID FINDINGS IN THE CASE OF SRJ PEETY STEELS PVT. LTD. MANUFACTURIN G TMT BARS ARE AS UNDER: - (A) COST OF ELECTRICITY AND RAW MATERIAL SHOWN TO BE 125% OF SELLING PRICE OF INGOTS. (B) SANCTIONED AUXILIARY LOAD WAS ONLY 7.8% OF THE TOTAL SANCTIONED LOAD BUT CLAIMED TO BE 25% BY APPELLANT IN STATEMENT; (C) COMMISSIONER O F INCOME TAX (APPEALS) CONFIRMED NET ADDITION OF INCOME OF RS.23.5 LAKHS ON ACCOUNT OF SUPPRESSED PRODUCTION OF INGOTS FOR ASSESSMENT YEARS 2001 - 02 TO 2006 - 07 . (D) CLANDESTINE CLEARANCE FOR SPECIFIC CASE ADMITTED BEFORE SETTLEMENT COMMISSION. COMMISSION. 8 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ SIMILAR OBSERVATIONS HAVE BEEN MADE BY THE HONBLE APPELLATE TRIBUNAL IN THE CASE OF OTHER MANUFACTURERS (INCLUDING THE APPELLANT) . THE HONBLE CESTAT HAS ALSO TAKEN SUPPORT OF DECISION OF HONBLE MADRAS THE HONBLE CESTAT HAS ALSO TAKEN SUPPORT OF DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF ALAGAPPA CEMENT PVT. LTD. VS. CEG AT & CCE, TRICHY (20100TIOL - 770 - HC - MAD - CS) AND HELD THAT THE REVENUE CANNOT BE FAULTED FOR DEMANDING DUTY ON THE STEEL INGOTS WHICH COULD HAVE BEEN MANUFACTURED BY CONSUMING EXCESS QUANTITY OF ELECTRICITY. THE HONBLE APPELLATE TRIBUNAL HAS HELD IN CONCLU DING PARA - 22 THAT NONE OF THE APPELLANTS EXCEPT M/S SHREE STEEL CASTINGS HAS MADE OUT THE PRIMA - FACIE CASE ON MERITS. THEY CANNOT RAISE A VALID PLEA OF LIMITATION EITHER. SUPPRESSION OF RELEVANT FACTS IS INBUILT IN CLANDESTINE PRODUCTION OF EXCISABLE GO ODS AND ITS REMOVAL WITHOUT PAYMENT OF DUTY, AND THE SAME, PRIMA - FACIE, STANDS ESTABLISHED IN THESE CASES. 7.3 IN VIEW OF THE FACTS OF THE CASE AND ABOVE MENTIONED REASONS MENTIONED BY THE A.O. AND RESPECTFULLY CONSIDERING OBSERVATIONS IN THE DECISION OF CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH ORDER DATED 01/03/2011 IN THE CASE OF THE APPELLANT AND OTHERS, I HOLD THAT THERE IS SUPPRESSION 01/03/2011 IN THE CASE OF THE APPELLANT AND OTHERS, I HOLD THAT THERE IS SUPPRESSION OF SALE AND PROFIT IN THE YEARS UN DER APPEAL AND HENCE THE PROFIT DECLARED BY THE APPELLANT CANNOT BE ACCEPTED WITHOUT MAKING FURTHER ADDITION ON ACCOUNT OF PROFIT ON SUPPRESSED SALE. 12. BOTH THE ASSESSEE AND THE REVENUE ARE IN APPEAL AGAINST THE ORDER OF CIT(A). 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE IDENTICAL 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. 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 F URNACE CASES AND RE - ROLLING MILLS. TH E TRIBUNAL IN THE CASE OF RE - ROLLING MILLS I.E. SHREE OM ROLLING MILLS PVT. LTD. VS. ADDL. CIT 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 A PPLICATION 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). THOUGH 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 REPRESENTATIVES. 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 ELAB ORATE LTD. ON 05.05.2015, THE LD. SPECIAL AR FILED WRITTEN NOTE AND MADE ELAB ORATE 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 9 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 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 CALLE D 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 REPRESENT ATIVE 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 SUBMIS SIONS. IT MAY BE PUT ON RECORD THAT M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) IS A CASE OF FURNACE, 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 AGAI NST THE SAID ORDER OF CCE, AURANGABAD BEFORE THE CESTAT AND THE THIRD MEMBER OF CESTAT DELETED 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 CERTAIN INFORMATION GATHERED BY THE DGCEI HAD MOVED A PETITION BEFORE THE SETTLEMENT COMMISSION AND OFFERED ADDITIONAL INCOME, WHICH WAS ACCEPTED BY THE SETTLEMENT COMMISS ION IN ENTIRETY. IN SOME CASES, SUCH OFFER OF ADDITIONAL INCOME WAS BEFORE THE EXCISE AUTHORITIES, 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 ELECTRICITY 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 THE DATA COLLECTED IN THE CASES OF FURNACE OWNERS I.E. M/S. SRJ PEETY STEELS PVT. LTD. AND OTHERS AND RELYING ON THE ADDITION 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 STEE LS 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 FOR 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 C LANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, WAS ALSO CONSIDERED BY THE TRIBUNAL 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 I N THE HANDS OF THE ASSESSEE IN ASSESSMENT YEAR 2007 - 08. FURTHER, IN ASSESSMENT YEAR 2008 - 09, 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 INQU IRY 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. W AS SUMMARIZED UNDER PARA 9, WHICH READS AS UNDER: - 9. AT THIS STAGE WE ARE NOT CONSIDERING 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 REASONABLE PERCENTAGE OF THE GROSS PROFIT IS TO BE ESTIMATED. LD. CIT(A), ACCORDINGLY, DIRECTED THE ASSESSING OFFICER TO ADOPT GROSS PROFIT @ 4% ON 10 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ THE VALUE OF ALLEGED SUPPR ESSED PRODUCTION/SALES AND ACCORDINGLY, PARTLY SUSTAINED THE ADDITIONS. NOW, WE FIRST DECIDE 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 CONSIDERING 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 PAG ES 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: - 13. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. LD. AR FOR THE ASSESSEE FILED ARGUMENT SYNO PSIS AND LD. SPL. AR FOR THE REVENUE ALSO HAS FILED NOTES OF HIS ARGUMENT ON 05 - 11 - 2014 WHICH 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. S O 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 SHOW N BY THE ASSESSEE WAS AT HIGHER SIDE AS COMPARED TO THE QUANTUM OF PRODUCTION DECLARED BY THE 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 T HE ASSESSEE SHOULD HAVE DECLARED OR SHOWN MORE PRODUCTION OF THE INGOT/BILLETS. SUBSEQUENTLY, ON THE BASIS OF THE INFORMATION RECEIVED FROM INGOT/BILLETS. SUBSEQUENTLY, 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 QUANTIFYI NG THE VALUE OF ALLEGED SUPPRESSED PRODUCTION AND ALLEGED EVASION OF EXCISE DUTY, THE ASSESSING 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 A LSO REFERRED TO ONE MATTER IN RESPECT OF THE ACTION CONDUCTED BY DGCE (INTELLIGENCE) AGAINST 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, MUMBAI 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 AUTHORITY 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 T HE ASSESSEE AND ITS GROUP COMPANIES BY THE INCOME - TAX DEPT. ON 17 - 03 - 2006 AND IN CONSEQUENCE 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 WA S ALSO FOUND. WE ALSO PUT ON RECORD THAT THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER IN CONSEQUENCE OF SEARCH AND SEIZURE ACTION AGAINST THE 11 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ ASSESSEE U/S. 153A R.W.S. 143(3) HAVE REACHED THE HON'BLE JURISDICTIONAL HIGH COURT. WE WILL LATER REFER TO T HE DECISION OF THE TRIBUNAL AS WELL AS HON'BLE HIGH COURT AND CERTAIN IMPORTANT OBSERVATIONS 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 A SSESSMENT 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 ORDER THE ASSESSING OFFICER HAS PLACED HIS RELIANCE ONLY ON THE INFORMATION RECEIVED FROM THE CENTRAL EXCISE AUTHORITIES AND THE PROCEEDING BEFORE THE SETTLEMENT COMM ISSION OF CENTRAL EXCISE & CUSTOM, MUMBAI. THE INVESTIGATION WAS CARRIED OUT BY CENTRAL EXCISE AUTHORITIES I.E. DGCEI, AGAINST FEW BROKERS/SUB - BROKERS AND THOSE BROKERS GAVE THE NAMES OF MANY 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 AS 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 FRO M 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 C ENTRAL EXCISE AGAINST THE BROKERS AND SUB - BROKERS ARE CONCERNED THE C ENTRAL EXCISE AUTHORITY ISSUED SHOW CAUSE TO THE ASSESSEE AS WELL AS THE OTHER MANUFACTURERS 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 AS SESSEE IS ONE OF THEM. AS PER THE INVESTIGATION DONE BY THE CENTRAL EXCISE AUTHORITIES, THE 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 ASS ESSING 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 REMOV ED 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 CENT RAL EXCISE AUTHORITIES I.E. DGCEI AND APPROACHED THE SETTLEMENT COMMISSION AND PAID THE EXCISE 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 FURTHE R 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 I N THE ASSESSMENT ORDER. AT THIS STAGE WE ARE NOT CONCERNED WITH THE SAID DISCUSSION WHICH IS 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 ELECTRI CITY SHOWN BY THE ASSESSEE THE PRODUCTION WAS MUCH MORE LOWER, HAS GIVEN THE EXAMPLES OR REFERENCE 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 12 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 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 UPON 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 WHERE 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 AS SESSMENT 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 METR IC TON ADOPTED BY THE CCE, AURANGABAD ARE VERY MUCH REASONABLE, FAIR AND JUSTIFIED AND HE ADOPTED THE SAME FOR THE PURPOSE OF CALCULATION OF ALLEGED UNACCOUNTED PRODUCTION OF FINISHED GOODS (PARA NO. 4.3 OF THE ASSESSMENT ORDER). 17. THE ASSESSING OFFIC ER 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, A URANGABAD AS PER HIS ADJUDICATION ORDER AND HELD THAT THE ASSESSEE HAS SUPPRESSED THE PRODUCTION 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 SUPPRESS ED PRODUCTION RS. 2007 - 08 20,751 18,892 39,20,37,546 2008 - 09 29,276 21,444 40,75,72,486 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 CO MPLETING THE ASSESSMENT U/S. 143(3) OF THE ACT IN THE ORDER DATED 31 - 12 - 2008 AND MADE THE NET 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 INFORMATION 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 C ENTRAL 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 M ENTIONING RS. ( - ) 1,91,62,000/ - AS PER THE ORDER U/S. 143(3) WHEN IN FACT THE SAID FIGURE IS 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 PRODUCTION / 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 FURNACE 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 RE LEVANT FINDING OF THE TRIBUNAL IN TURN, INCORPORATING THE ORDER OF THIRD MEMBER OF CESTAT IN PARAS 19 TO 19.4, WHICH READ AS UNDER: - 13 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 19. IN SUM AND SUBSTANCE IN BOTH THE ASSESSMENT YEARS THE ASSESSING OFFICER HAS DETERMINED ALLEGED SUPPRESSION OF THE P RODUCTION/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 - 2 009 (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 H AS 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 TECHNICAL OPINION REPORT THE CONSUMPTION OF ELECTR ICITY FOR MANUFACTURE OF ONE METRIC TON OF STEEL INGOTS VARIES BETWEEN 555 TO 1026 ELECTRICITY 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 MT 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 PRODUC TION OF M.S. INGOT/BILLETS ON THE BASIS OF CONSUMPTION OF 1026 UNITS (MAXIMUM LIMIT) OF ELECTRICITY 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 R ECORDS. THE LD. CCE ACCORDINGLY, OBSERVED THAT THE ASSESSEE HAS WILLFULLY SUPPRESSED THE FIGURES 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 RE MOVAL OF FINAL PRODUCTS. HE ALSO INVOLVED THEMSELVES IN THE CLANDESTINE RE MOVAL 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 ASSE SSE DEMANDED THE CROSS EXAMINATION OF DR. N.K. BATRA, PROFESSOR OF IIT, KANPUR WHICH OPINION 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 POSS IBLE. 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 COMMI SSION 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 ME MBER AND THE MATTER WAS REFERRED TO THE LD. THIRD MEMBER TO RESOLVE THE FOLLOWING DIFFERENCES: 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. 14 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 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 IMPUGNED 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 TH AT THE ORDER PASSED BY LD. COMMISSIONER OF CENTRAL EXCISE AND CUSTOM, AURANGABAD WAS NOT SUSTAINABLE 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 O PINED THAT THE JUDGMENT IN R.A. CASTING (SUPRA) IS SQUARELY APPLICABLE IN THE FACTS OF THE INSTANT APPEALS. IN R.A, CASTING THE ELECTRICITY CONSUMPTION WAS 2072 TO 2443 UNITS PER MT, WHICH IS HIGHER THAN THE AVERAGE ELECTRICITY CONSUMPTION IN THE INSTANT A PPEALS. 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 PLA NT COMMITTEE CONSTITUTED BY THE MINISTRY OF STEEL, GOVERNMENT OF INDIA; (III). 1427 UNITS PER 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, (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 HIGHER, 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/MT 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 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 I N 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; 15 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ (III). 1427 KWH/T AS PER 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 ASSOCI ATION, NEW DELHI (MR. VARSHNEY); (V). 851 UNITS/MT IN THE CASE OF NAGPAL STEEL V. CCE, CHANDIGARH 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 UNITS ADOPTED BY THE REVENUE AS ARBITRARY. AFTER THIS FINDING, WHICH IS UPHELD BY THE HON'BLE ALLAHABAD HIGH COURT AND EVEN SLP HAS BEEN DISMISSED, THERE WAS NO REASON F OR THE COMMISSIONER IN THE INSTANT CASES TO CONSIDER THE NORM OF 1026 UNITS ALLEGEDLY AS PER 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 ACTU ALLY HIGHER THAN THAT REPORTED IN DR. BATRA'S REPORT. 20.4 IT IS ALSO SEEN THAT THE ALLEGATIONS 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 L AST 4 - 5 YEARS, WHICH WAS ECONOMICALLY AND COMMERCIALLY NOT POSSIBLE, (III). GENERATION OF FICTITIOUS 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 MATERIAL 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, CONSUMPTION OF ELECTRICITY, LABOUR EMPLOYED AND PAYMENT MADE TO THEM, PACKING MATERIAL USED, RECORDS OF SECURITY OFFICERS, .DISCREPANCY IN THE STOCK OF RAW MATERIALS AND FI NAL PRODUCTS; (IV). CLANDESTINE REMOVAL OF GOODS WITH REFERENCE TO ENTRY OF VEHICLE/TRUCK IN THE FACTORY PREMISES, LOADING OF GOODS THEREIN, SECURITY GATE RECORDS, TRANSPORTERS' DOCUMENTS, SUCH AS L.RS, STATEMENTS OF LORRY DRIVERS, ENTRIES AT DIFFERENT CHE CK 16 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ POSTS, FORMS OF THE COMMERCIAL TAX DEPARTMENT AND THE RECEIPT BY THE CONSIGNEES; (V). AMOUNT 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 WE RE 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. SIMIL AR IS THE FACT SITUATION IN THE INSTANT APPEALS, 20.5 THE EVIDENCE AS PER REVENUE IN THE INSTANT APPEALS ARE - A). HIGH ELECTRICITY CONSUMPTION WITHOUT ANY EXPLANATION, B). SALE OF INGOTS AT LOSS, WHICH WAS ECONOMICALLY AND COMMERCIALLY NOT POSSIBLE, C). DI SCREPANCIES 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 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 W OULD 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 HE LD THAT - '23. THE TRIBUNAL HAS CONSISTENTLY TAKEN THE VIEW THAT WHEREVER ELECTRICITY CONSUMPTION 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 HA D BEEN DIRECTED TO CARRY OUT EXPERIMENTS IN DIFFERENT FACTORIES ON DIFFERENT DATES TO ARRIVE AT THE AVERAGE TO 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 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, WHI CH CAN BE ADOPTED FOR FUTURE. THE IMPUGNED DEMAND BASED MERELY ON ASSUMPTIONS AND PRESUMPTIONS 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 17 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 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 T O BE ARBITRARY BY HON'BLE TRIBUNAL IN RA CASTING (SUPRA). THUS, IN MY OPINION THE PRIMARY EVIDENCE RELIED IN THE IMPUGNED ORDER IS ITSELF INADMISSIBLE, AND NO OTHER EVIDENCE IN THE INSTANT CASE PROVES CLANDESTINE PRODUCTION AND CLEARANCE TO SUSTAIN, THE DE MAND, IT IS CONTENDED BY REVENUE THAT FURNACES INSTALLED IN THE FACTORY OF PRESENT APPELLANTS 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 SUCH FINDING IN THE OR DERS 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 PRECISION, 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 H ON'BLE MEMBER (TECHNICAL). IT IS SEEN THAT EVEN THIS JUDGMENT WAS CONSIDERED IN R.A. CASTING (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 O F PREPONDERANCE OF PROBABILITIES. HOWEVER, ESTABLISHED ON THE BASIS O F 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 REDUC ED IN FACTORIES OF ALL THE APPELLANTS, I AM OF THE VIEW THAT IT CANNOT BE - .A' BASIS TO SUSTAIN 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 AGRE E WITH THE FINDING OF THE HON'BLE VICE PRESIDENT THAT IN. ANY EVENT, THIS ADDITIONAL MATERIAL 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 18 00 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 THE IMPUGNED ORDERS, THERE IS NO SUCH REASON TO DISCARD T HE REPORT AND IN ANY EVENT THE LETTER OF MR. R.P. VARSHNEY SUGGESTING THAT ELECTRIC CONSUMPTION 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 APPLICA BLE. 23. REVENUE, ALSO RELIED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF MELTON 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 C OMMISSIONER 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 18 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 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 ASSESSMENT 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 FOR 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 UNEXPLAIN ED WIDE FLUCTUATIONS IN THE PRODUCTIVITY AS COMPARED TO THAT IN A.Y. 2004 - 05, BUT ALSO BECAUSE 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 STATU TES OTHER THAN CENTRAL EXCISE ACT, DO NOT ANY MANNER HELP IN SUSTAINING THE FINDINGS RECORDED IN THE IMPUGNED ORDER. IN NONE OF THESE CASES ANY THEORETICAL REPOT WAS RELIED FOR ARRIVING AT DEEMED PRODUCTION. 24. FURTHER, IN SARVANA ALLOYS STEELS PVT LTD, 2011 - (274) ELT 248 (TRI - BANG.) SIMILAR ORDER BASED ON POWER CONSUMPTION WAS HELD UNSUSTAINABLE 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 TH EREFORE CONCUR WITH THE FINDINGS OF THE HON'BLE VICE PRESIDENT AND IN MY OPINION, THE JUDGMENT IN R.A. CASTING (SUPRA) PRESIDENT AND IN MY OPINION, THE JUDGMENT 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 - 0 7 - 2006 AS PER THE MAJORITY OPINION ALLOWING THE APPEALS FILED BY THE ASSESSEE AND OTHER APPELLANT 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 CO NSIDERED THE INVESTIGATION MADE BY THE DGCEI AGAINST SOME BROKERS AND IN CONSEQUENCE THE SHOW 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 TH E EXCISE DUTY. HENCE, THE INVESTIGATION OF THE DGCEI MADE AGAINST THE BROKERS AND SUB - BROKERS 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 AR E MERELY BASED ON THE ALLEGED SUPPRESSION OF THE PRODUCTION BY ESTIMATING CERTAIN CONSUMPTION 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 THAT TH E 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 ORD ER 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 T HE PRODUCTION/SALES HAVE NO LEGAL LEGS TO STAND. 19 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 59. THE TRIBUNAL THEREAFTER, DEALT WITH 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 OBJECTION 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 THE 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. (SUPR A) WERE AS UNDER: - 20.1 THE LD. TECHNICAL MEMBER OF THE CESTAT. THE LD. SPL. AR FOR THE 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 APPRO ACHED THE SETTLEMENT COMMISSION WHEN ON THE BASIS OF INVESTIGATION MADE BY THE DGCEI AGAINST SOME OF THE BROKERS AND SUB - BROKERS DEALING IN THE INGOTS/BILLETS AND TMT BARS SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE COMPANY AND MATTER WAS SETTLED. LD. CC E, 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 T HE ASSESSEE WAS FOUND TO BE INVOLVED. IN ONE INSTANCE THAT ASSESSEE HAD APPROACHED THE SETTLEMENT COMMISSION, ADMITTED THE EVASION OFFENCE OF AN IDENTICAL NATURE AND HAD OBTAINED IMMUNITY FROM CRIMINAL PROCEEDINGS. THE ASSESSEE HAS HOWEVER ARGUED THAT EAC H CASE HAS TO BE TREATED AS A SEPARATE CASE BASED ON ITS OWN MERIT AND DEALT WITH ACCORDINGLY. THE ARGUMENT OF THE ASSESSEE IS ACCEPTED. NO RELIANCE HAS BEEN 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 BAS ED 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 ADJUDICATION 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 RELIED 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 MAI NTAINING OF FORM NO.G - 7 IN RESPECT OF ELECTRICITY CONSUMPTION, WAS ALSO BEFORE THE CESTAT AND 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. THOUGH 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 AN Y PERSON - SEC. 17, SEC. 106 AND SEC. 115 OF THE INDIAN EVIDENCE ACT ETC. BUT THE FACT REMAINS 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 20 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 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, M UMBAI BY MAJORITY OPINION AND HENCE, FOUNDATION OF ASSESSMENTS FOR A. YRS. 2007 - 08 & 2008 - 09 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 AUTHORIT Y THEN THE ENTIRE ORDER GETS MERGED WITH THE ORDER OF THE HIGHER APPELLATE FORUM WHICH IN THE PRESENT CASE IS CESTAT. MOREOVER, INVESTIGATION BY DGCEI AND PROCEEDING BEFORE THE SETTLEMENT COMMISSION HAS ALSO BEEN CONSIDERED BY THE CCE, AURANGABAD IN HIS AD JUDICATION ORDER. THE SAID ORDER WAS SUBJECT MATTER BEFORE THE CESTAT AND SAID ORDER HAS BEEN 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 INDIAN 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 CONSU MPTION, THE SAID ISSUE WAS ALSO BEFORE THE CESTAT WHILE DECIDING THE FATE OF ORDER OF THE LD. CCE, AURANGABAD. LD. 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 UN DER THE CUSTOM ACT 1962 AND CENTRAL EXCISE ACT 1944 AND WE CANNOT SIT AS REVISIONARY AUTHORITY 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 E XCISE ACT, 1954 AND THE TRIBUNAL (INCOME - TAX) COULD NOT ACT AS REVISIONARY AUTHORITY OR MAKE 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 TH E ACT ON 17.03.2006 AGAINST M/S. SRJ PEETY STEELS PVT. UNDER SECTION 132(1) OF TH E 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 TRIBU NAL IS REPORTED IN 137 TTJ (PUNE) 627. THE TRIBUNAL IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) 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 H ELD THAT IN THE SAID CASE OF SEARCH AND SEIZURE, IT WAS ALSO HELD THAT THE CONSUMPTION OF ELECTRICITY FOR THE MANUFACTURE OF MILD STEEL, INGOTS / BILLETS DEPENDING ON VARIOUS FACTORS AND THERE WAS NO JUSTIFICATION TO CHARGE THE ASSESSEE THAT IT HAD SUPPRES SED 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 AN D OTHER COMPANIES BY THE HONBLE BOMBAY HIGH COURT AND THERE WERE OBSERVATIONS ON THE ESTIMATION 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 UN DER: - 22. WE HAVE ALREADY MENTIONED HERE - IN - ABOVE THAT IN THE CASE OF THE ASSESSE, THE SEARCH 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 WER E FRAMED U/S. 153A R.W.S. 143(3) OF THE ACT. THE ASSESSING OFFICER REJECTED THE BOOKS OF ACCOUNT 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 CONSUMPTION 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 21 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ PRODUCTION AND MADE THE ADDITION IN ALL THE YEARS WHILE COMPLETING THE ASSESSME NTS. IN SUM AND SUBSTANCE THE ASSESSING OFFICER HAD SIMPLY TAKEN THE LOWEST ELECTRICITY CONSUMPTION 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 CO NCEALED INCOME. THERE ARE CERTAIN IMPORTANT OBSERVATIONS AND FINDINGS OF THE TRIBUNAL WHICH 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 T HE 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 RELATING 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 E ACH OF THE YEAR UNDER CONSIDERATION WAS VERY WELL PLACED BEFORE THE AUTHORITIES BELOW IN THE 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 ACCE PTED 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 E ACH YEAR: ASST. YR. ELECTRICITY CONSUMPTION PRODUCTION (MT) YEARLY AVERAGE CONSUMPTION (UNITS) 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 23,24 0.189 1856 2005 - 06 62650888 29,582.434 2118 2006 - 07 70440580 36,017.983 1956 32. THE MATTER 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 BEF ORE 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 PROCEEDINGS UNDER S. 153A OF THE ACT. WHEN NOTHING INCRIMINATING WAS FOUND IN THE COURSE OF SEARCH R ELATING TO ANY OF THESE ASSESSMENT YEARS, THE ASSESSMENTS FOR SUCH YEARS COULD NOT BE DISTURBED 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 T O THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH. THE RELEVANT IT RETURNS FOR SAID YEARS 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 22 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 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 CAS E 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) W HETHER THE ANNUAL PROFITS CAN BE PROPERLY DEDUCED FROM THE METHOD EMPLOYED? (C) WHETHER THE 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 T HE YEARS UNDER CONSIDERATION, THE AO DEVISED A STATISTICAL FORMULA ON THE BASIS OF ELECTRICITY 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 CONSUMPTION FOR A MONTH IN THE WHOLE YEAR AND TREATED THE PRODUCTION IN THAT MONTH AS THE CORRECT PRODUCTION AND THEN PRODUCTION IN THAT MONTH AS THE CORRECT PRODUCTION AND THEN PROCEEDED TO ARRIVE AT HIS PRODUCTION FIGURE BY MULTI PLYING THE PRODUCTION IN THE BOOKS BY THE RATIO OF PRODUCTION TO THE ELECTRICITY CONSUMPTION 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 BREAK DOWNS AND THE CHEMICAL COMPOSITION OF THE LIQUID METAL WHICH HAS TO BE FINALLY CAST INTO INGOTS/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 MANUFAC TURE OF ROUND/TMT BARS AND ARRIVED AT A CONCLUSION THAT THERE IS AN EXCESS CONSUMPTION OF ELECTRICITY 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. 2000 - 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 IMP ACT ON THE ASSESSMENTS OF THE ASSESSEE COMPANY FROM THE ASST. YRS. 2000 - 01 TO 2005 - 06. THEREFORE, 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 A LL JUSTIFIED. ACCORDINGLY ADDITIONS HAVE RIGHTLY BEEN DELETED IN ASST. YRS. 2000 - 01 TO 2005 - 06 IN BOTH THE CASES. 23 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 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 E LECTRICITY FOR THE MANUFACTURING OF MILD STEEL INGOTS/BILLETS DEPENDS ON VARIOUS FACTORS AND THERE WAS NO JUSTIFICATION TO CHARGE THE ASSESSEE THAT THE ASSESSEE HAS SUPPRESSED THE PRODUCTION AND INDULGED INTO UNACCOUNTED PRODUCTION. THE ORDER OF THE TRIBU NAL WAS CHALLENGED BY THE DEPARTMENT BEFORE THE HON'BLE HIGH COURT OF BOMBAY BENCH AT AURANGABAD 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 - 201 4, 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, ACCOMPANIES BY ALL REQUISITE DOCUMENTS AND PROCEEDINGS. THE SCRUTINY WAS THUS COMPLETED. DURING THE COURSE OF SEARCH, NO INCRIMINATING MATERIAL WAS FOUND RELATING TO THE S AID 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 UNIT 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 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 INCRIMINATING 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 LD. SPL AR FOR THE 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 OUT 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 INVESTIG ATION HAS BEEN DONE BY THE REVENUE WHICH ARE IMMEDIATE NEXT ASSESSMENT YEARS AFTER THE SEARCH 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 24 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ IMPORTANT TO DECIDE THE PRESENT APPEALS MORE PARTICULARLY ON THE ADDITIONS BASED ON CONSUMPTION 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 REVENU E 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 INF ORMATION RECEIVED FROM CENTRAL EXCISE (LUDHIANA) AND WHEN MATTER REACHED BEFORE THE TRIBUNAL AND IT IS HELD AS UNDER: 10. THE ASSESSEE HAD FILED AN APPEAL AGAINST THE ORDER OF CIT CUSTOMS & EXCISE, BEFORE THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNA L 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 OBSERVED 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 PRO DUCTION. IT WAS FURTHER OBSERVED BY THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL VIDE PARA 4.2 THAT SO FAR AS EXCISE & SERVICE TAX APPELLATE TRIBUNAL VIDE 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 OU TPUT 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 T O 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 THEREFORE, ALLOWED WITH 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 REVENUE 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 O F THE CENTRAL EXCISE DEPARTMENT AND THE SUPPRESSION IN PRODUCTION CALCULATED BY THE SAID INVESTIGATING TEAM. 25 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 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, EXCISE & 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 THAT 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 & SERVI CE TAX APPELLATE TRIBUNAL IN ASSESSEE'S OWN CASE THERE IS NO MERIT IN ANY ADDITION BEING MADE 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 THE OBSERVATIONS OF CIT (APPEALS) IN DELETING THE AFORESAID A DDITION AS NO INDEPENDENT EVIDENCE HAS BEEN BROUGHT ON RECORD TO ESTABLISH THAT THE ASSESSEE 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 DIS MISS THE GROUND NOS.1 AND 2 RAISED BY THE REVENUE. 26. IN THE CASE OF ACIT VS. ARORA ALLOYS 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 DI RECTOR OF THE SAID COMPANY BEFORE THE CENTRAL EXCISE AUTHORITIES. THE LD. CIT(A) ALLOWED THE ASSESSEES APPEAL. THE REVENUE CHALLENGED THE ORDER OF LD. CIT(A) THE 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 THE 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/BILLETS 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. THE 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 THE 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 PAR AS 27 TO 29 HELD AS UNDER: - 27. THE NEXT ISSUE IS THE REJECTION OF BOOKS OF ACCOUNT BY THE 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, AURANGABAD 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 OTHE R REASONS ARE GIVEN BY THE ASSESSING OFFICER. WE HAVE ALREADY HELD THAT THE ASSESSING OFFICER 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 ABOV E REASON CANNOT BE UPHELD. WE, ACCORDINGLY, ALLOW GROUND NO. 7 IN THE A.Y. 2007 - 08 AND GROUND NO. 5 IN THE A.Y. 2008 - 09. 26 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 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 UNDISCLOSED 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, WORKED 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 ASSESSI NG OFFICER. AS THE ASSESSEE HAS SUCCEEDED IN GETTING THE RELIEF BY DELETING THE ENTIRE ADDITIONS TOWARDS ALLEGED SUPPRESSION OF PRODUCTION AND SALES, HENCE, THIS ADDITION DOES NOT SURVIVE AND SAID ADDITION IS ALSO DELETED. WE, ACCORDINGLY, ALLOW THE GROU ND NO. 10 TAKEN BY THE ASSESSEE. 67. THE TRIBUNAL ALSO DISMISSED THE APPEAL OF THE REVENUE 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 ESTIMA TION 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 AD DITIONS ARE THE GROUNDS TAKEN BY THE REVENUE DO NOT SURVIVE AS THE ENTIRE AD DITIONS ARE DELETED IN BOTH THE ASSESSMENT YEARS BY ALLOWING THE GROUNDS TAKEN BY THE ASSESSEE. 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 W AS THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE RATIO LAID DOWN IN 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 ELECTRICI TY AS PER US STANDARD. HOWEVER, THE LD. SPECIAL AR STRESSED THAT THE ISSUE RAISED IN THE PRESENT APPEAL WAS AT VARIANCE. VIDE HIS WRITTEN SUBMISSIONS, HE HAS RAISED IDENTICAL GROUNDS OF APPEAL AND HAD ELABORATELY TOOK US THROUGH VARIOUS SUBMISSIONS AND H AS RELIED ON DIFFERENT CASE LAWS. THE CONTENTION OF THE LD. SPECIAL AR IS SHEER WASTE OF PROCESS 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 TH E ASSESSEE BEFORE US I.E. SHREE OM ROLLING MILLS PVT. LTD. 69. WE FIND THAT THE ASSESSING OFFICER IN THE PRESENT CASE BEFORE US HAD MADE THE ADDITION ON ACCOUNT OF ERRATIC CONSUMPTION OF ELECTRICITY BASED ON THE CONSUMPTION OF ELECTRICITY AS PER US STAN DARDS. 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. B ATRA WITH REGARD TO ELECTRIC CONSUMPTION AND THE THIRD MEMBER OF CESTAT HAD DELETED THE AFORESAID 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 CONSUMPTION 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 27 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ LEARNED AUTHORIZED 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. (SUPR A) 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 CO URSE OF HEARING OF THE BUNCH OF APPEALS WAS THAT IT HAD MOVED MISCELLANEOUS APPLICATION AGAINST 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, T HE 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 AUTHORIZED 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 AVAI LABLE TO THE REVENUE UNDER SECTION 254(2) OF THE ACT. IN VIEW THEREOF, THE NEXT OBJECTION OF THE LD. SPECIAL AR 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 ANO THER 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 A PPLIED THE RATIO LAID DOWN BY THE TRIBUNAL IN M/S. SRJ PEETY STEELS PVT. LTD. (SUPRA) AND HELD 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 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 STAND. 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. A NOTHER 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. SPECIAL 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 PAYMENT 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 ADMI TTED TO ADDITIONAL INCOME ON SUCH ACCOUNT BEFORE THE ASSESSING OFFICER, THE SALES FOR THE ENTIRE 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 CONDUCTED BY DGCEI ON CERTAIN BROKERS AND SUB - BROKERS. CONSEQUENT THERETO, SHRI 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 COMMISSION 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 28 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ ASSESSEE HAD NOT CORRECTLY DISCLOSED THE PRODUCTION OF TMT BARS. TH E BASIS FOR SUCH ASSUMPTION WAS THE ELECTRICITY CONSUMPTION, FOR WHICH THE ASSESSING OFFICER 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 PARAS 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 OFFICER 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 ASS ESSING 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 TH E 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 T HE BASIS OF EXTRAPOLATION OF SALES FOR 300 DAYS, IN VIEW OF THE ADMISSION OF THE ASSESSEE OF 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 T HE SAID AMOUNT VIDE PETITION BEFORE THE SETTLEMENT COMMISSION, WHICH HAS BEEN ACCEPTED BY THE 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, S INCE THE OBJECT OF MOVING PETITION BEFORE THE SETTLEMENT COMMISSION IS TO SETTLE THE DISPUTE. IN CASES WHERE ANY SETTLEMENT PETITION IS MOVED BY THE CLAIMANTS, THE AUTHORITIES HAVE THE POWER TO RE - VISIT THE OFFER MADE BY 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 MADE 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 IS 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 CLANDES TINE 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 ASSESS EE 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 ISSUE RAISED IN 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 ANS WER, 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 ARE 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 DOCUMEN TS FOUND DURING THE COURSE OF SEARCH, WHICH WERE ADMITTED BY THE ASSESSEE TO REFLECT SUPPRESSION OF SALES. ON THE BASIS OF AFORESAID DOCUMENTS, THE INCOME FOR THE YEAR WAS 29 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ EXTRAPOLATED, WHICH ORDER OF THE TRIBUNAL WAS APPROVED BY THE HONBLE BOMBAY HIGH C OURT. 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 ABS ENCE OF ANY EVIDENCE COLLECTED AGAINST THE ASSESSEE, MERELY BECAUSE THE ADDITION WAS MADE IN 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 AS SESSMENT YEAR 2007 - 08 SHOULD BE MADE IN THE HANDS OF THE ASSESSEE, IN VIEW OF THE SETTLEMENT 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 MAKI NG 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 SET TLEMENT 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 DELETED. THE LD. SPECIAL 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 ME RIT 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 I N THE HANDS OF THE ASSESSEE IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND FOR THE BALANCE 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, CERTA IN 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 ADDED IN THE HANDS OF THE ASSESSEE. THE SAID INFORMATION WAS FORWARDED TO THE C ENTRAL 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 MATE RIAL WITHOUT PAYMENT OF EXCISE DUTY WAS FOUND FROM THE POSSESSION OF THE ASSESSEE BY THE EXCISE 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 SUPPRESSED 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 AND AGAIN STRESSED THAT THE ASSESSEE HAD MADE ADMISSION BEFORE THE ASSESSING OFFICER AND THIS WAS THE EVIDENCE AVAILABLE WITH THE ASSESSING OFFICER. THE ALLEGED ADMIS SION BEFORE THE ASSESSING OFFICER WAS ONLY BY WAY OF THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE, 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 TH E SETTLEMENT COMMISSION. NO STATEMENT OF DIRECTORS OF THE ASSESSEE COMPANY WAS RECORDED EITHER 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 T HIS REGARD. THE ADDITION AT BEST IS TO BE RESTRICTED TO THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE. 30 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ 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 CA NNOT 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 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 BOT H 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 ADJUDIC ATED 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 EXT RAPOLATION 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 EVIDENC E. WE ARE IN AGREEMENT WITH THE DEPARTMENT WAS AN IMPORTANT PIECE OF EVIDENC E. WE ARE IN AGREEMENT WITH THE SAID PROPOSITION LAID DOWN BY THE HONBLE SUPREME COURT IN PULLANGODE RUBBER PRODUCE CO. LTD. VS. STATE OF KERALA AND ANOTHER (SUPRA), BUT THE STATEMENT MADE BEFORE ANY OF THE AUTHORITIES IS LIMITED TO THE AMOUNTS SURRENDER ED VIDE THE SAID SETTLEMENT AND NO INFERENCE COULD BE DRAWN AGAINST THE ASSESSEE FOR EXTRAPOLATING 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 SU PPORT 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 A NY OTHER ASSESSMENT YEARS. 82. FURTHER, BEFORE THE HONBLE DELHI HIGH COURT IN CIT VS. ANAND KUMAR DEEPAK KUMAR (SUPRA), THE ISSUE WAS IN RELATION TO THE EVIDENCE FOUND OF 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 ASSESS ING OFFICER ON THE SAID BASIS ASSUMED UNACCOUNTED SALES DURING THE ENTIRE YEAR, WHICH WAS DELETED 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 TRIBU NAL IN CHATTISGARH STEEL CASTING PVT. LTD. V. ACIT (SUPRA) DECIDED SIMILAR ISSUE OF THE INFORMATION AVAILABLE WITH THE CENTRAL EXCISE DEPARTMENT, WHEREIN UNACCOUNTED SALES WAS ESTIMATED FOR 56 DAYS CENTRAL EXCISE DEPARTMENT, WHEREIN UNACCOUNTED SALES WAS ESTIMATED FOR 56 DAYS AND THE ASSESSING OFFICER ESTIMATED THE SALES FOR THE REMA INING PERIOD. THE ADDITION WAS DELETED IN THE HANDS OF THE ASSESSEE AND WAS RESTRICTED TO THE 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 AC COUNT 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 ON GUESS WORK AND PRESUMPTION WAS NOT SUSTAINABLE IN LAW. NO DETAILS WERE AVAILABLE TO THE ASSESSING 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 THEI R SEARCH OPERATIONS. THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER IS PURELY BASED ON 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 AUTHORITI ES. SUCH ADDITION BASED ON HYPOTHETICAL OUT BY THE CENTRAL EXCISE AUTHORITI ES. SUCH ADDITION BASED ON HYPOTHETICAL CALCULATION OF TURNOVER AND ESTIMATION OF GP ON PRESUMPTION 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 RELIE D ON THE SAID DECISION AND IN VIEW OF 31 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ THE DECISION OF COORDINATE BENCH ON SIMILAR ISSUE AS BEFORE 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 85. THE LD. SPECIAL AR DURING THE COURSE OF ARGUMENTS BEFORE THE TRIBUNAL IN MISCEL LANEOUS 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 THE REAFTER, 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 RAISE D 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 JUST ICE, WE WOULD LIKE TO 41. BEFORE CLOSING THE ISSUE, IN THE INTEREST OF JUST ICE, 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 SEARCH AND SEIZURE OPERATION ON CERTAIN BROKERS, EVIDENCES OF CLANDESTINE REMOVAL OF M ATERIAL WITHOUT PAYMENT OF EXCISE DUTY, WAS FOUND AGAINST THE ASSESSEE. HOWEVER, NO SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AGAINST THE ASSESSEE, BUT THE ASSESSEE CLAIMS THAT IN ORDER TO BUY PEACE OF MIND, IT HAD DECLARED THE SAID AMOUNT BY WAY OF PE TITION 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 T HE PERSON MAKING THE OFFER. IT MAY ALSO BE NOTED THAT THE SETTLEMENT ACCEPTED IN THE HANDS OF 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 PE TITION FOR A PARTICULAR YEAR ON WORDS, ONCE A PERSON MAKES A SETTLEMENT PE TITION 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 DELHI HIGH COURT IN CIT VS. ANAND KUMAR DEEPAK KUMAR (SUPRA). THE LD. SPECIAL AR HAD PLACED RELIANCE ON THE DECISION OF HONBLE BOMBAY 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 COU RT 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 IS UNDISCLOSED INCOME OF THE BLOCK PERIOD AND NOT THE TOTAL INCOME OR LOSS OF THE PREVIOUS YEAR REQUIRED TO BE ASSESS ED UNDER REGULAR ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THE HONBLE BOMBAY HIGH COURT HELD 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 ASSES SING OFFICER HAD TO ASSESS ONLY THE UNDISCLOSED INCOME. HOWEVER, THE HONBLE BOMBAY HIGH COURT 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 FACTS 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 ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2006 - 07 IS MISPLACED AS THE ADDITION IN THE 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 WER E FOUND FOR FEW DAYS. HOWEVER, NO 32 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ INDEPENDENT INVESTIGATION / INQUIRY BY THE INCOME - TAX DEPARTMENT HAS BEEN MADE BEFORE COMPLETING ASSESSMENT PROCEEDINGS AGAINST THE ASSESSEE. ANOTHER ASPECT OF THE ISSUE IS THAT THE PETITION BEFORE THE SETTLEMENT COMMISS ION HAS BEEN MADE BY THE ASSESSEE IN ASSESSMENT YEAR 2007 - 08 ONLY AND NO SUCH PETITION FOR CLANDESTINE 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 - 08 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 HAVING 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 CL ANDESTINE REMOVAL OF MATERIAL AND THE INVESTIGATION CARRIED OUT BY THE DGCEI AND THE PETITION 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 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. SP ECIAL 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 THEOR Y 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 S TEELS PVT. LTD. (SUPRA) AND THE SAME HAD BEEN CONSIDERED BY THE TRIBUNAL. DURING THE COURSE OF HEARING, THE LD. SPECIAL 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 FA CTS 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 CIRCUMSTANC ES, WE HOLD THAT NO EXTRAPOLATION OF SALES FOR 300 DAYS CAN BE MADE IN THE HANDS OF THE ASSESSEE 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 ASS ESSEE BY WAY OF FILING PETITION BEFORE THE SETTLEMENT COMMISSION, WHICH IN TURN, HAS ALSO BEEN 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. ADMI TTEDLY, 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 ADMIT TED 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 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. WE HAVE HEARD BUNCH 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 E VIDENCE AND / OR ANY INVESTIGATION OR INQUIRY MADE BY THE 33 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ ASSESSING OFFICER AND WHERE THE ASSESSING 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 AC COUNT 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 BOTH 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 CLAN DESTINE 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 INVESTMENT IN PURCHASES UNDER SECTION 69C OF THE ACT. 14. THEREAFTER, CORRIGENDUM ORDER WAS PASSED BY THE TRIBUNAL SUBSTITUTING PARA 88 OF THE TRIBUNAL AND IT WAS HELD A S UNDER: - 3. ON PERUSAL OF THE RECORD, WE FIND THAT BY AN ERROR, THE FINDINGS OF THE TRIBUNAL 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 EQ UIVALENT TO PROFITS ON SUPPRESSED PRODUCTION @ 4% OR ACTUAL GP RATE DECLARED BY THE ASSESSEE 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 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. ACCORDI NGLY, 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 SETTLE MENT COMMISSION OR BEFORE THE EXCISE AUTHORITIES, IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, 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 CLANDESTINE REMOVAL OF MATERIAL WITHOUT PAYMENT OF EXCISE DUTY, BY THE ASSESSEE BEFORE THE EXCISE AUTHORITIES. THUS, THE ASSESSEE IS DIRECTED TO FILE THE REQUISI TE 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. 15. THE ISSUE ARISING BEFORE US IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL I N SHREE OM ROLLING MILLS PVT. LTD. VS. ADDL. CIT (SUPRA) . FURTHER, DURING THE YEAR UNDER CONSIDERATION, NEITHER INVESTIGATION BY THE DGCEI NOR ANY SUPPRESSED PRODUCTION 34 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ HAS BEEN DETECTED AND ADMITTED BY THE ASSESSEE. FURTHER, THE ASSESSEE HAS NOT MOVED A NY PETITION BEFORE THE SETTLEMENT COMMISSION OR ANY OTHER EXCISE AUTHORITIES. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES AND IN THE ABSENCE OF ANY EVIDENCE COLLECTED BY THE ASSESSING OFFICER OF ALLEGED REMOVAL OF GOODS WITHOUT PAYMENT OF EX CISE DUTY, MERELY ON THE BASIS OF ESTIMATION OF ALLEGED SUPPRESSED PRODUCTION IN THE EARLIER YEARS I.E. RELATING TO ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 , THERE IS NO MERIT IN MAKING ANY ADDITION IN THE HANDS OF ASSESSEE. FURTHER, THE TRIBUNAL IN ASSESSEE S OWN CASE IN ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 VIDE ORDER DATED 15.07.2015 WITH LEAD ORDER IN SHREE OM ROLLING MILLS PVT. LTD. VS. ADDL. CIT (SUPRA) HAS DELETED THE ADDITION MADE IN THE HANDS OF ASSESSEE ON ACCOUNT OF ALLEGED SUPPRESSION OF PRODUCTION. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE DELETE ADDITION MADE IN THE HANDS OF ASSESSEE BY THE CIT(A) TO THE EXTENT OF 4% OF THE SAID ALLEGED PRODUCTION. ACCORDINGLY, GROUND OF APPEAL RAISED BY THE ASSESSEE AGAINST REJECTION OF BOOKS OF ACCOUNT AND CONFIRMING THE ADDITION MADE ON ACCOUNT OF SUPPRESSION OF PRODUCTION BY APPLYING GP RATE OF 4% ON THE ALLEGED PRODUCTION OF SALE ARE ALLOWED. FURTHER, THE GROUND S OF APPEAL RAISED BY THE REVENUE AGAINST THE ORDER OF CIT(A) IN QUANTIFYING T HE SUPPRESSED PRODUCTION @ 4% AND DELETING THE ADDITION OF WORKING CAPITAL ARE DISMISSED. 1 6 . SIMILARLY, THE REVENUE IN ITA NO.05/PN/2015 RELATING TO ASSESSMENT YEAR 2011 - 12 IS AGGRIEVED BY THE ORDER OF CIT(A) IN DELETING THE ADDITION MADE ON ACCOUNT OF S UPPRESSED PRODUCTION OF RS. 1,58,11,901/ - . 1 7 . THE FACTS AND ISSUE RAISED BY THE REVENUE IN ASSESSMENT YEAR 2011 - 12 IS IDENTICAL TO THE FACTS AND ISSUE IN EARLIER YEAR AND FOLLOWING THE SAME PARITY OF REASONING, WE FIND NO MERIT IN THE GROUNDS OF APPEAL RA ISED BY THE REVENUE AND THE SAME ARE DISMISSED. CONSEQUENTLY, THE APPEAL OF THE ASSESSEE IN ASSESSMENT 35 ITA NOS. 1884 AND 2022 /PN/2014 ITA NO.05/PN/2015 SHIVSHAKTI RE ROLLING MILLS PVT. LTD. ITA NOS.839 TO 842/PN/ YEAR 2010 - 11 IS ALLOWED AND THE APPEALS OF REVENUE IN ASSESSMENT YEARS 2010 - 11 AND 2011 - 12 ARE DISMISSED. 1 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF MARCH , 201 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