TMI Blog2012 (7) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... arihoke and Shri Rakesh Kumar, JJ. Shri T.R. Rustogi, Advocate, for the Appellant. Shri S.R. Meena, DR, for the Respondent. ORDER The facts leading to this appeal are, in brief, as under. 1.1 The appellant are engaged in the manufacture of a product called Kimam or compound. They purchased raw kimam and mixed the same with perfumes, fragrances and small quantity of spices. The product so obtained was transferred to three other factories of the appellant where the same was mixed with shredded tobacco leaves/flakes to make branded chewing tobacco, which was being sold under brand name Tulsi Zafrani Zarda. During the period of dispute i.e. during period from April 1994 to October 1996, the appellant were clearing the kimam to their other units without payment of duty. The department issued a show cause notice dated 19-6-1997 alleging that this product is excisable and chargeable to Central Excise duty under Tariff Heading 2404.49 prior to 23-7-1996 and sub-heading 2404.40 thereafter. The show cause notice sought recovery of Central Excise duty amounting to Rs. 16,91,79,394/- and also imposition of penalty. The show cause notice was adjudicated by the Commissioner of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 121/94-C.E. and beside this, penalty of Rs. 2,00,00,000/- was also imposed on them. The Commissioner, however, refrained from imposing penalty on Shri J.D. Desai, Senior Manager of the appellant firm and Shri Rajiv Kumar, Partner of the appellant firm. Against this order of the Commissioner, the appellant filed an appeal before the Tribunal which was disposed of vide final order No. 384/11-EX, dated 7-4-2011 [2011 (270) E.L.T. 670 (Tri.)] by which the appeal filed by the appellant was dismissed. While dismissing the appeal, the Tribunal held that the appellant are not eligible for benefit of Notification No. 121/94-C.E., dated 11-8-1994, in view of judgment of the Constitutional Bench of the Hon ble Supreme Court in the case of CCE, New Delhi v. Hari Chand Shri Gopal reported in 2010 (260) E.L.T. 3 (S.C.). 1.2 In respect of this judgment of the Tribunal, the appellant filed an application for rectification of mistake apparent from record under Section 35C(2) of the Central Excise Act on the ground that while in the appeal against the Commissioner s order, the imposition of penalty of Rs. 2,00,00,000/- had also been challenged, in the final order passed by the Tribunal, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period of dispute while Rule 173Q(1)(a) of Central Excise Rules, 1944 provided for penalty on any manufacturer, producer or registered person of a warehouse or a registered dealer for removal of any excisable goods in contravention of any of the provisions of Central Excise Rules, 1944 or the notification issued under these rules, Rule 173Q(1)(d) provided for imposition of penalty for contravention of any of the provisions of these rules or of the notification issued under these rules with intent to evade the payment of duty. The appellant s plea is that since there was no mala fide intention on the part of the appellant, the penalty of Rs. 2,00,00,000/- imposed on them under Rule 173Q(1)(d) of the Central Excise Rules is not justified. However, this plea of the appellant is not acceptable in view of the findings of the Apex Court in paras 22 and 23 of its judgment, wherein the Apex Court while holding the product being manufactured by the appellant as excisable has also upheld invoking of proviso to Section 11A(1) for the recovery of duty. In this regard, paras 22, 23, 24 and 25 of the judgment are reproduced below :- 22. It was urged that the assessee was under a bona fide i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the demand for duty herein and, therefore, there was no intention to evade payment of duty. 24. We do not find any merit in these submissions. As stated above, the adjudication in this case was confined to the question of excisability and concealment of the existence of two units in which the compound (kimam) was manufactured. No explanation has been given by the assessee for not disclosing the affairs of these units, particularly when the assessee was in business for couple of years and when the assessee had been dealing with other traders who operated from licensed factories. It was for the assessee to explain the reasons for not getting the units registered or licensed. It was for the assessee to explain its failure to maintain the records under the 1944 Act and rules thereunder. In each of the above decisions, we find that there was substantial compliance of the rules under the said Act. In each of the decisions the findings indicate technical non-compliance and not total non compliance of the rules. It was for the assessee to explain the basis of its alleged bona fide impression. In this connection, no evidence was put before the commissioner about receipt and utilization ..... X X X X Extracts X X X X X X X X Extracts X X X X
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