D.C. Mandal, Member (T)

1. Brief facts of the case are that the appellants generated electricity in their own plant and also purchased electricity from D.V.C. The electricity generated by them and also that purchased from D.V.C. got mixed up in a common grid before the same was consumed in the appellants' own plant as well as in the township outside the appellants' generating plant. The appellants did not pay Central Excise duty on the electricity generated by them and claimed that no duty was payable by them on the said electricity under Notification No. 52/78-CE, dated 1.3.1978. Under this Notification, electricity was exempted from Central Excise duty provided it was proved to the satisfaction of the Assistant Collector of Central Excise that such electricity was produced by the generating station, Industrial Unit or an establishment, and is subsequently used in such generating station including Auxiliary Plant, if any. A show cause notice dated 2.1.1982 was issued to the appellants asking them to explain why Central Excise duty on electricity consumed during the period from 1.3.1978 to 31.10.1981, should not be recovered under Rule 9(2) and why penalty should not be imposed on them under Rule 173-Q(2) and Rule 210 of the. Central Excise Rules, 1944. The appellants contended before the Collector of Central Excise, Patna, who adjudicated the case, that the electricity consumed by them within the plant was much more than the electricity generated by them in their own plant and as such it should be presumed that the entire quantity of electricity generated by them was consumed within the plant and no portion of the same was supplied in the township outside the plant and therefore the benefit of Exemption Notification No. 52/78-CE, dated 1.3.78 was admissible to them. The Collector of Central Excise, Patna did not accept the contention of the appellants. In the impugned order, he held that the benefit of exemption could not be granted to the appellants on the basis of presumption. As the electricity generated by them got mixed up with the electricity obtained from D.V. C. in a common grid before supply to the plant and township, they should pay duty on the electricity supplied by them for other than industrial uses in proportion to the electricity generated by them and that obtained from D.V.C. in a particular month. In taking this decision the Collector followed the judgment of Patna High Court in a Civil Writ Jurisdiction case in 62 of 1983 of M/s. TISCO In which the High Court held that"...it would be appropriate if the petitioner pays the duty on the electricity supplied by them for other than the industrial uses in proportion to the electricity generated by themselves and that obtained from D.V.C. in a particular month". The Collector, however, confirmed the demand for duty for a period of six months prior to the issue of show cause notice on 2.1.1982 as there was no suppression of facts on the part of the appellants. The Collector directed the appellants to pay the demand under Rule 173-F read with Rule 9(2) of the Central Excise Rules, 1944. They were also directed by the Collector to fulfil other requirements of law and procedures, such as obtaining L-4 licence, submission of classification list etc. The Collector did not impose any penalty on the appellants. The present appeal has been filed by the appellants M/s. SAIL against the said order-in-original of the Collector of Central Excise, Patna.

2. During the hearing before us, Shri Mookherjee, learned advocate argued for the appellants and Smt. Dolly SaxenS, learned SDR argued for the respondent. On merit of the case the learned advocate reiterated the contention of the appellants as raised before the Collector of Central Excise, Patna. The learned advocate also argued that the Department had acquiescence in the non-levy of duty. Therefore, Central Excise duty as payable, should be paid from the date of the show cause notice, I.e. from 2.1.1982. He contended the Co