TMI Blog2004 (10) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... facts pertaining to goods produced after the said period as in the instant case. In the present case, insofar as the period 1-4-1995 to 11-3-1997 is concerned, there is no evidence whatsoever, whether it be one of procurement and utilization of raw material or of production and clearance of supari out of the factory or of sale of such goods to show that the assessee had clandestinely manufactured and removed supari during the said period. Hence we are unable to sustain the demand of duty raised by the Commissioner on M/s. Ravi Kumar Co. for the period 1-4-1995 to 11-3-1997. A demand for the subsequent period on the same basis was held unsustainable. In the case of Emami Ltd. v. CCE, Kolkata [ 2002 (7) TMI 160 - CEGAT, KOLKATA] ], a similar view was taken by the Tribunal. We find, there is no dearth of decisions on the point, which are in favour of the appellants in the instant case. We, therefore, set aside the demand of duty. The goods were seized on the premise that they were kept for clandestine removal. This, again, is only a speculation, which cannot be a basis for seizure and confiscation. We set aside the confiscation. Having found that the demand of duty is not sustainable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only) seized from M/s. Vijayalakshmi Enterprises under Rule 173Q of Central Excise Rules, 1944. However, considering the extenuating circumstances, I give them an option to redeem the same on payment of a nominal fine of Rs. 15,000/- (Rupees Fifteen thousands only). (iv) I confiscate the goods valued at Rs. 1,28,000/- (Rupees One lakh twenty eight thousand only) seized from Shri Paranthaman under Rule 173Q of Central Excise Rules, 1944. However, considering the extenuating circumstances, I give them an option to redeem the same on payment of a nominal fine of Rs. 12,000/-(Rupees Twelve thousand only). (v) I confiscate the goods valued at Rs. 33,000/- (Rupees Thirty three thousand only) seized from Shri Veerabhadran under Rule 173Q of Central Excise Rules, 1944. However, considering the extenuating circumstances, I give them an option to redeem the same on payment of a nominal fine of Rs. 5,000/- (Rupees Five thousand only). (vi) I confiscate the Plant and Machinery belonging to M/s. Ravi Kumar Co., utilized in the manufacture of the offending goods under Rule 173Q (2) of the Central Excise Rules, 1944. However, I give an option to redeem the same on payment of a fine of Rs. 10,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Vijayalakshmi Enterprises, M/s. Ajanta Enterprises and M/s. Murali Enterprises. On this basis, the Department issued a show-cause notice to M/s. Ravi Kumar Go. and others proposing to demand duty for the period 1-4-1994 to 11-3-1997 from M/s. Ravi Kumar Co., to confiscate the excisable goods seized from their premises as well as the premises of some of their dealers and to impose penalties on all of them. The show-cause notice also proposed to deny the benefit of SSI exemption under Notification No. 1/93-C.E. dated 28-2-1993 for a part of the period of dispute, alleging that the aggregate value of clearances by M/s. Ravi Kumar Co. for the relevant financial years had exceeded the prescribed exemption limits. An amount of Rs. 10 lakhs which was paid by M/s. Ravi Kumar Co. during the course of investigations, at the instance of Central Excise authorities, was proposed to be appropriated towards the above demand. Section 11AC of the Central Excise Act, in addition to Rule 173 Q of the Central Excise Rules, 1944, was invoked in the show-cause notice to penalize M/s. Ravi Kumar Co. while Rule 209A of the Central Excise Rules, 1944 was invoked against the other noticees for imposing pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for inferring that raw materials such as raw arecanuts were procured from them by M/s. Ravi Kumar Co. and, without accountal, used for manufacturing scented supari. Counsel argued that the statements which were subsequently retracted could not be relied on to reach a finding of clandestine manufacture of scented supari. The finding of clandestine manufacture and clearance was entirely based on assumptions and presumptions. It was argued that a demand of duty could not be raised on a purely theoretical basis unsupported by positive evidence. In any case, it could not be basis for raising demand of duty for the past period. In support of this argument, ld. Counsel relied on a plethora of decisions. In one of these cases, viz Ghodavat Pan Masala Products and Others v. CCE, Pune [2004 (175) E.L.T. 182 (T) = 2004 (62) RLT 891 (CESTAT - Mumbai)], the Tribunal rejected the Department s case against the assessee of clandestine production and removal. The case of the Department was based only on theoretical calculation of pouches generated per kgm. of Printed Laminated Rolls . Certain confessional statements made by the assessee were also retracted in that case. The Tribunal held that, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has been appealed against. However, in answer to a query from the Bench, it has been reported by SDR that the operation of the above judgement has not been stayed in the Writ Appeal. The decision in the Writ Petition was that betel-nut powder (supari) was not excisable. The Revenue has no case that the question of excisability of supari for the period prior to 16-3-1995 is not covered by the High Court s judgment. Therefore, in the absence of stay of operation of the said judgement, we have only to affirm the Commissioner s order as regards dutiability of betel-nut powder (supari) for the period prior to 16-3-1995. Ld. Commissioner has rightly held the goods to be non-dutiable for the said period by following the ruling of the High Court. The second challenge in the Revenue s appeal is against abatement of duty in valuation of the goods, allowed to the assessee under Section 4(4)(d)(ii). This challenge cannot be sustained in view of the Tribunal s Larger Bench decision in Srichakra Tyres v. CCE [1999 (108) E.L.T. 361]. We are told by ld. Counsel that this decision of the Larger bench has been upheld by the Supreme Court in CCE, Delhi v. Maruti Udyog Ltd. [2002 (141) E.L.T. 3 (S.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of pouches. The officers verified the pouches with reference to its individual weight filled/empty, and also verified the output of each individual denomination of pouches per 100 gms Betel Nut Powder/Packing laminated Rolls, the details of which are given below : Denomination of Betel Nut pouches No. of Empty pouches/100 gms. No. of filled pouches/100 gms. 0.20p 773 117 0.25p 650 93 0.60p 320 65 Re. 1/- 234 45 Rs. 2/- 91 24 The officers also obtained the samples based on which the above ratios were arrived as the same was required for investigation under the Central Excise Act/Rules, 1944. The proceedings were completed at 16.15 Hrs. The Mahazar was drawn on the spot and completed at 16.30 Hrs during which time no harm was caused to person/property and the entire proceedings was conducted in a peaceful manner. (1) Sd/-4-4-1997 (N.R. DILLI BABU) Mahazar drawn by me Sd/- (DAVID VIJAYRAJENDRA) Inspector of C. Ex., HPU Madras -34 Sd/- 4-4-1997K. SANKARA RAO (Prop. M/s. Ravi Kumar Co) (2) Sd/- 4-4-1997 (G. NANDA KUMAR) Goods seized by me and sample obtained. Sd/- (Supdt. H.P.U.) 4-4-1997 (C. DURAIMA) The quantitative yardstick for raising the subject demand is not discernible from thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er emerge. But this by itself would not sanctify any guess work (as in this case) for estimating production for the past period on the basis of weighment of laminated plastic roll, for demand of duty. The Tribunal s decision in Ghodavat Pan Masala Products (supra), in our view, squarely works in favour of the appellants. The appellants can legitimately claim support from certain other decisions (cited by their Counsel) also. In the case of I.T.C. Ltd. v. CCE, Bangalore [Tribunal s Final Order No. 333/1996-D dated 13-5-1996 [1996 (87) E.L.T. 453 (T)] in Appeal No. E/1318/88-D], it was held that cigarette sample checks undertaken by the Department on 5th, 6th and 8th September, 1986 were not to be made applicable to past clearances of cigarettes. In the case of Sri Sakthi Textiles (P) Ltd. v. Government of India Others [Madras High Court s order dated 1-4-1972 in W.P. No. 1421/71], it was held that, on the basis of the results of tests on samples of goods, duty could not be levied on the goods manufactured and cleared prior to the period of sampling. The Government themselves had taken the same view in the case of National Textile Corporation [1982 (10) E.L.T. 639 (GOI)], Aggarwal Me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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