Per G.R.Sharma : M/s Madhu Food Products, Hyderabad have filed this appeal against the order of Collector of Central Excise, Calcutta. The ld. Collector in his order had held :-

"22. Having regard to the forgoing, I hold that the contraventions alleged in the notice are proven.

23. Under Rule 173-Q of the Central Excise Rules, 1944, I impose a penalty of Rs. 10,000/- on M/s Madhu Food Products Kathedan, Hyderabad and hold that the biscuits valued Rs. 10,712.58 seized by the officers on 5.6.84 are liable to confiscation under Rule 173-Q of the Central Excise Rules, 1944. However, as the goods seized had been provisionally released and are not available for confiscation I appropriate the cash security sum of Rs. 900/- furnished by the company. 24. Under Rule 9 (2) of the CE Rules, 1944 read with Section 1 1 - A of the Central Excises Act, 1944, I order that duty amounting to Rs. 81/- BED and SED Rs. 4.05 on the 180 kg. of button biscuits valued Rs. 810/ - and Rs. 32,867.55 BED + Rs. 1643.38 SED on the value of Rs. 4,38.234/- representing the suppressed production shall be paid by M/s. Madhu Food Products."

2. Briefly stated the facts of the case are that on a visit to the appellant's factory premises on 5.6.84 the Central Excise Officers found on physical stock verification some shortages and some excesses in the quantity of the finished product (biscuits) as also in the quantities of the raw materials. It was also noticed that RG-1 register showing the quantity of goods manufactured and accounted for in Form IV Register in respect of raw materials were not written for the period from 26th May to 4th June, 1984. An investigation was undertaken which confirmed that the raw material account and the RG-I account were not maintained properly. Accordingly a show cause notice was issued to the appellants alleging that the appellants had suppressed production and removed goods without payment of duty and without accounting in the statutory records with an intention to evade payment of duty. The appellants were asked to explain as to why duty amounting to Rs. 1,45,845.34 as Basic Excise Duty (BED) and Rs. 7,292.27 as Special Excise Duty (SED) should not be demanded from them under the proviso to Section 11-A of the CESA, 1944 as also why the seized goods should not be confiscated among other things as set out in the show cause notice.

3. Shri N. Ramanathan, the ld. Consultant appearing for the appellants submitted that the appellants were entitled to the benefit of exemption under Notification No. 83/83 for the year 1984-85; that the estimates of suppression of production is based on an adhoc formulae that one unit of power consumption would result in 1.33 kgs. of biscuits on the basis of certain assumptions and presumptions which was not correct; that the data adopted based on experiments was faulty, incomplete and incorrect; in as much as 10% allowance given for other purposes was not sufficient; that during the period from April, 1983 to March, 1984 there were 262 number of instances of break-downs; that besides breakdowns in power supply, voltage fluctuations also should have been taken into consideration; that the allowance of 94 units given for heating did not cover the cooling operations which again consumed a lot of electricity; that the experiments were confined to Glucose Biscuits (Big size); that there were other varieties which were not taken for purpose of experiments; that re-cycling process was also not taken into consideration. The ld. Consultant, therefore, submitted that in any event it is not legal, correct or proper to demand duty on the basis of estimated production on the basis of power consumption etc. and in support of this contention, the ld. consultant cited and relied upon the ratio of the decision of the Hon'ble Supreme Court in the case of Containers Corporation Vs. CEGAT reported in 1986 (24) ELT 173 (SC). Unless norms had been fixed already on the basis of normal quantum of production during the given tim