Per Shri V.P. Gulati :

The issue in the appeal relates to the demand of duty in respect of Iron and Steel Products which have been held to have been manufactured and cleared without payment of duty during the period from 1.4.94 to 31.12.94. The brief facts of the case are: On the visit by the Central Excise officers to the appellants unit they came across a bundling note book containing entries in regard to the quantum of Iron and Steel products manufactured by the appellants which had been bundled and loaded by a labour contractor, one Shri C. Ravi. The entries in this book pertain to the period from 19.8.94 to 3.10.94. On comparison of the figures in this bundling note book as entered in this note book with the RG-1 figures showing the production and clearance of goods, it was found that the appellant had brought on record only a part of their production during this period. A statement was recorded by the officers from Shri Ravi as well as from the partner of the appellants firm, Shri Sachin Kumar. Both of them accepted that the full production had not been recorded and that the entries in the bundling note book represented the actual quantum produced in the unit which were bundled and despatched. Thereafter, further investigation was done and on going by the appellants' production pattern as reflected in the bundling book and the statement of Shri C. Ravi, Shri Sachin Kumar and Shri V. Pannerselvam, department demanded duty of Rs. 5,21,826/-. After taking into consideration the pleas made by the appellants, this demand was confirmed and also appellants were levied a penalty of Rs. 50,000/- under rule 173Q read with rule 9 (2) of the Central Excise Rules.

2. The learned advocate Shri B.V. Kumar for the appellants has pleaded that the evidence available in regard to excess production was only for a limited period from 14.8.94 to 3.10.94 and the demand in regard to the excess production therefore can only be made at best to the extent of quantum as reflected in the bundling book. He has pleaded that the learned lower authority was in error in having adopted the same pattern of production for demanding the duty even beyond 3.10.1994, the period during which no records as such of any excess production were available. He, however, fairly conceded that the appellants' electricity consumption during this period was more or less uniform with a minor variation from month to month of about 5% or so. He has pleaded that the demand therefore was made based on assumptions and presumptions. In this connection, he has cited the decision in the case of Ashwin Vanaspati Industries Pvt. Ltd. Vs. Collector of Central Excise reported in 1992 (59) ELT 175 (T). In this connection he drew our attention to para of 18 of this decision which is reproduced below for convenience of reference :-

18. We strengthen our findings on the basis of the various rulings rendered by this Tribunal. Time and again, it has been held that notebook maintained by labourers containing unauthenticated entries and over-writing are not a dependable record to establish clandestine removal unless the same is supported by other evidence, such as, raw materials consumed, goods actually manufactured and packed [Kashmir Vanaspati (P) Ltd. Vs. Collector of Central Excise and Raza Textiles Ltd. Vs. Collector of Central Excise] supra. The other citations produced by the learned Advocate have also been considered and carefully perused by us and it is now a settled law that the evidences for clandestine removal has to be cleared and unrebuttable and relying upon the entire rulings the impugned order has to be set aside.

In that case, he pleaded in the note book recorded by the labourers containing unauthenticated entries with over-writings was not accepted by the tribunal as reflective of the excess production and the same is not dependable. He also cited the decision of the tribunal in the case of Madhu Foods Products Vs. CCE Hyderabad reported in 1995 (76) ELT 197 (T) in support o