TMI Blog2014 (11) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... rest liability thereon under Section 11AB of the said Act. Central Excise duty demands in respect of Terpene and in respect of Menthol Crystals are upheld against M/s. Tien Yuan India (P) Ltd. under Section 11A of the Central Excise Act, 1944 along with interest thereon under Section 11AB and penalty of equivalent on the said firm under Section 11AC of the Central Excise Act, 1944 are upheld. Confiscation of goods valued at ₹ 95.08 lakhs (approx.) seized on 23-6-2006 at the premises of M/s. Tien Yuan India (P) Ltd., Taloja, under Rule 25 of the Central Excise Rules, 2002 along with option to redeem the same on payment of fine of ₹ 22 lakhs is upheld. The balance of demands towards duty, interest and penalties (other than those mentioned above) are set aside. - E/664-667/2009-Mum - Final Order Nos. A/775-778/2014-WZB/C-II(EB) - Dated:- 5-11-2014 - Shri P.R. Chandrasekharan, Member (T) and Anil Choudhary, Member (J) Third Member on reference : Shri P.S. Pruthi, Member (T) Shri V. Sridharan, Sr. Advocate with Prakash Shah, Advocate, for the Appellant. Shri K.M. Mondal, Spl. Consultant, for the Respondent. ORDER [Order per : P.R. Chandra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JDL, Jammu), M/s. Tien Yuan India Pvt. Ltd., Taloja (in short, TYIL, Taloja) and M/s. Jindal Drugs Ltd., Mumbai (in short, JDL, Mumbai) are three group companies having common Directors, namely S/Shri S.K. Jindal, Vijay Jindal and Ajay Jindal. (ii) JDL, Jammu was set up in April, 2005 as a new unit in the specified area of Jammu and Kashmir for the purpose of availing benefit of Notification No. 56/2002-C.E., dated 14-11-2002. It manufactures Deterpenated/De-fractionated Mentha Oil (DFMO) from Crude Mentha Oil (CMO) which is an agricultural product and is non-dutiable. The manufacture of DFMO involves deterpenation of CMO by fractional distillation process where terpene (which is dutiable) is generated as a by-product. It commenced its production w.e.f. 19-4-2005. The DFMO is cleared on payment of Central Excise duty to TYIL, Taloja and refund of duty paid is claimed in terms of para 2A(a) of the Notification No. 56/2002-C.E., dated 14-11-2002. (iii) TYIL, Taloja manufactures inter alia, Menthol Menthol Crystals by using DFMO received from JDL, Jammu on which it avails Cenvat credit under Cenvat Credit Rules, 2004. TYIL clears Menthol and Menthol Crystals to JDL, Mumbai, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 7% (d) L. Menthol : 76 - 85% L. Menthol is the main chemical component both in CMO DFMO. (vii) The investigation also revealed that during the period April, 2005 to October, 2006 JDL, Jammu had despatched 662 consignments of DFMO to TYIL, Taloja. In 429 consignments of DFMO, the percentage of L. Menthol was found to be 76.5% to 88%, while in respect of remaining 233 consignments of DFMO, the percentage of L. Menthol was found to be below 76.46% as per the Protocol of Analysis reports prepared at TYIL, Taloja. The investigation was, therefore, of the view that the 233 consignments were not DFMO but actually CMO. (viii) After completion of investigation, proceedings were initiated by issue of a show cause notice dated 20-6-2007 seeking, inter alia, recovery of erroneous refund of ₹ 22,13,22,732/- from JDL, Jammu in terms of para 2A(g) of Notification No. 56/2002-C.E., read with Section 11A of the Central Excise Act, 1944. The notice also sought to recover interest under Section 11AB and impose penalty on it under Section 11AC of the Act. The notice also sought to recover Cenvat credit of ₹ 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es separate out from the CMO and emerge on the top of the distillation column along with water. Terpene along with water are collected in tanks and allowed to cool/settle. The water is drained off and terpene is collected. The terpeneless material which remains at the bottom of the distillation column is collected as pale yellow coloured Defractionated Mentha Oil (DFMO), also called Deterpenated Mentha Oil. Whenever colourless DFMO is required, the yellow coloured DFMO obtained is taken to the second distillation column, wherein a temperature differential is maintained between the top and bottom of the distillation column. Heavy materials separate out as black pitch/residue in the bottom of the column. Separation of black pitch from the pale yellow coloured DFMO results in colourless DFMO which is called Water White DFMO. The DFMO manufactured at the Jammu Unit is sent to TYIL, Taloja where Menthol crystal is manufactured. The Menthol crystals so manufactured are exported by M/s. Jindal Drugs Ltd., Mumbai, a merchant exporter, under Rule 18 of the Central Excise Rules, 2002. (ii) The allegation of the Revenue is that out of 662 consignments of DFMO despatched by M/s. JDL, Jammu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . According to Indian Standard IS 528-1999, wherein specification of CMO is given, the minimum L-Menthol content is 60%. Even if the entire terpene is removed, the L-Menthol content in DFMO would be only 65.93%. Therefore, the cut off point of 76.46% mentioned in the statement dated 10-5-2007 is purely theoretical and notional. The question put to Shri Vijay Jindal was if the L-Menthol content of the starting material is 71.95% and terpene, 7.28%, what would be percentage of L-Menthol in DFMO. Considering these two figures as the composition of starting material, Shri Vijay Jindal answered that the percentage of L-Menthol in DFMO would be 76.46%. If the composition of the starting material is different, then a different result would ensue. Therefore, no reliance can be placed on the cut-off point of 76.46%. As per the analysis prepared at the Jammu plant, the percentage of L-Menthol and Terpene in CMO was found to vary from 71% to 75% and 4% to 8% respectively. In the consignment of DFMO cleared by the appellant, the percentage of terpene was found to be less than 1% in most of the cases, which itself proves that the appellant had removed terpene from the CMO and obtained DFMO. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-1-2006, the credit taken at Taloja plant cannot be denied and therefore, the confirmation of demand for recovery of credit taken by TYIL is clearly unsustainable in law and consequently, no penalty is imposable. (viii) As regards the confiscation of L-Menthol and CMO at Taloja, these items were meant for export and were in process. Hence, the question of entering the details in the RG-1 Register does not arise. In view of the above position, the confiscation and consequent imposition of fine is unsustainable in law. In any case, the appellant had discharged the duty liability. In view of the above, it is prayed that the impugned order be set aside and the appeals allowed. 4. The learned Special Consultant appearing for the Revenue, on the other hand, made the following submissions : - 4.1 The case of the Revenue is based not only on the statements of various company officials and other independent persons, but also on the records seized during the investigation from the premises of both JDL, Jammu TYIL, Taloja. These are briefly discussed herein below : A. Statements (a) In his statement dated 31-1-2006, Shri P.G. Patil, Quality Control Executive of TYIL, Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 006; on perusal of the same it was observed that average percentage of Terpenes and L. Menthol comes to 7.28% and 71.95 % respectively, please state on the basis of Average percentage of Terpenes and L. Menthol, what should be the percentage of L. Menthol in Deterpenated/fractionated Mentha Oil in the period 2005/06? Ans. 4 Considering Mentha Oil with L. Menthol 72.95% and Terpenes content of 7.28% the Deterpenated/fractionated oil would contain about 76.46% L. Menthol. (d) In his statement dated 7-3-2006, Shri Atul Mehare (Chemical Engineer), shift-in-charge at JDL, Jammu had, inter alia, stated that as per his information, substantial quantity of crude mentha oil was despatched as such to Taloja and in the records it was shown as deterpenated mentha oil during the months of December, 2005 and January, 2006. He also stated that the plant was closed/out of production since last week of December, 2005. Regarding shortage of 22.860 MTs of Crude Mentha Oil and excess stock of about 7 M/Ts of Terpene found during stock verification on 7-3-2006, Shri Atul Mehare stated that shortage of Crude Mentha Oil might have occurred due to the fact that four trucks of material received from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aloja during the year 2005-2006 and in support of this, he had produced Ledger Account of TYIL for the relevant period. (i) In his statement dated 2-4-2007, Shri Hanish Kumar, Manager (Production) in Ambika International, Jammu had given the percentage of CMO and DFMO as below : CMO (a) L-Menthol 70 - 75% (b) Terpene 5 - 6% (c) Menthone 8 - 10% DFMO (a) L-Menthol 80 - 88% (b) Terpene Below 1% (c) Menthone 2 - 3% In support of the above composition, he submitted quality control report of CMO and DFMO showing the percentage of L-Menthol and Terpene. M/s. Ambika International, Jammu is also engaged in the manufacture of DFMO from CMO by the distillation process. B. Analytical Report vis-a-vis Protocol of Analysis reports : (i) JDL, Jammu prepares Analytical reports to ascertain the Terpene and L-Menthol contents in respect of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 72.9415% (i) A.R. No. - 05R 401/29-12-2005 A.R. No. - 05R 401/29-12-2005 Terpene L. Menthol 0.2649% 0.1561% 73.7534% 73.6649% (iii) A.R. No. - 05R 403/30-12-2005 A.R. No. 05R 403/30-12-2005 Terpene 0.8747% 0.6215% L. Menthol 73.6908% 75.1575% (v) During the scrutiny of records, it was also noticed that the Protocols of Analysis were not available in the resumed records for the period from 22-12-2005 to 16-1-2006. While tendering his statement on 10-5-2007 at Mumbai, Shri Vijay Jindal promised to submit the same on 11-5-2007 but failed to do so. However, the soft copy of the same (in CD) was received on 23-5-2007. Out of 45 Protocols of Analysis (Sl. Nos. 398 to 442) received on 23-5-2007, four (i.e. s. Nos. 399, 400, 401 403) were already available on record and the data contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that admitted facts need not be proved further as held by the Hon ble Apex Court in the case of CC, Madras v. Systems Components Pvt. Ltd. - 2004 (165) E.L.T. 136 (S.C.). (vii) In light of the above evidences, 233 consignments of so-called DFMO containing less than 76.46% of L-Menthol have been rightly taken as CMOs by the Department. D. References from the book Mint Indian Standards 4.3 Ld. Senior Counsel has made an attempt to say that percentage of L-Menthol in DFMO can be less than 76.46%. In this regard he has sought to take support from a book called Mint (The Genus Mentha) and Indian Standard (Oil of Mentha Arvensis - specification). He has invited attention of the Hon ble Bench to the para which begins with the sentence A typical flow scheme for the isolation of natural menthol from crude cornmint oil is as follows . In particular, he has referred to sub-para 5 which reads as follows : 5. The oil containing 68% to 78% menthol is put into slightly tapered galvanized steel containers, which are, in turn, placed upright in a deep freezer. The temperature is maintained at - 40 degree C or lower. This process, which is known as fast crystallization, yiel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of wrong availment of area based exemption under Notification No. 56/2002-C.E. It is now well settled that subsequent show cause notice on a different ground can be issued for the same period as held by the Hon ble Tribunal in the case of Sparr Engg. v. CCE, Bangalore-II - 2007 (207) E.L.T. 545 DCW Ltd. v. CCE, Madurai - 1988 (35) E.L.T. 167. However, ld. Sr. Counsel for the appellants did not press this point any further. F. Confiscation 4.5 Ld. Senior Counsel for the appellants also contended that the ld. Commissioner has erred in imposing redemption fine on the seized goods without holding that the same are liable to confiscation. Hence, this part of the order cannot be sustained. In this connection, it may be mentioned that the show cause notice states that the seized goods are liable to confiscation for contravention of Rule 10 of the Central Excise Rules, 2002. Viewed from this angle, no fault can be found with the impugned order, notwithstanding the fact that there is no express finding in this regard. G. Penalty under Section 11AC on JDL, Jammu 4.6 Ld. Senior Counsel for the appellants mainly urged that in the facts of this case, penalty imposed under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring this period at Jammu was none other than CMO. Therefore, the appellant could not have availed the benefit of Notification No. 56/2002 in respect of such clearances. Consequently, the unit at Taloja also could not have availed any Cenvat credit on such wrong duty payment on Crude Mentha Oil. Therefore, the demand of duty on JDL, Jammu and denial of credit to TYIL, Taloja in respect of this amount is clearly sustainable in law and we uphold the same. Consequently, the appellant would also be liable to pay interest liability on this amount. 5.2 As regards the balance demand on DFMO cleared from Jammu, the entire demand is based on Mr. Vijay Jindal s statement, wherein he had mentioned that L-Menthol content in DFMO should be 76.46% and above. Other than this statement, there is no other evidence adduced by Revenue to show that the goods cleared were not DFMO. The test reports in respect of these consignments clearly show that the terpene content was less than 1% in most of the cases, whereas as per the records maintained at JDL, Jammu, the terpene content in CMO was 4% to 9%. This shows that the goods cleared were deterpenated. Whether deterpenation would amount to manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng reasons. Section 11AC provides for imposition of penalty when there is short levy or non-levy on account of fraud, collusion or any wilful misstatement or suppression of facts and contravention of any of the provisions of this Act, or of the Rules made thereunder with an intent to evade payment of duty. Rule 4 of the Central Excise Rules, 2002 provides for clearance of goods on payment of duty and Rule 6 mandates that the assessment of the duty payable by the appellant himself and Rule 8 provides for manner of payment of duty. When the assessee himself wrongly and deliberately assessed the duty by claiming ineligible exemption, on account of which short levy or non-levy arose, it is also a contravention of provisions of the Act and the Rules. The notification 56/2002-C.E. has been issued under the provisions of Section 5A of the Central Excise Act and once the notification is issued and laid before the Parliament, it becomes an integral part of the Act itself. The hon ble Apex Court in the case of Orient Weaving Mills (P) Ltd. v. Union of India [AIR 1963 SC 98 = 1978 (2) E.L.T. (J311) (S.C.)] had held as follows : - Section 37 authorises the Union Government to make rules to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore, the imposition of penalty under Section 11AC is clearly and unequivocally warranted. M/s. TYIL at Taloja clearly knew that what they had received from the Jammu unit during the impugned period was only CMO and not DFMO and yet chose to avail ineligible Cenvat credit as the goods received were different from those declared in the invoices and were not manufactured goods at all. Therefore, recovery of ineligible Cenvat credit taken and availed under Rule 14 of Cenvat Credit Rules read with Section 11A along with interest thereon and imposition of penalty under Rule 15 read with Section 11AC are clearly sustainable in law and we hold accordingly. The argument that since the duty credit taken has been reversed subsequently at Jammu and therefore, TYIL can take the Cenvat credit is totally untenable and unacceptable for the reason that credit can be taken only on duty paid manufactured goods received for further manufacture. Since the goods received were unmanufactured CMO and not the goods mentioned in the invoices, that is, DFMO, the question of taking any credit will not arise at all ab initio and such availment would be a complete mockery of the Cenvat Credit Scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation forthcoming from TYIL in this regard. Therefore, the confirmation of duty demand along with interest thereon is clearly sustainable in law. As regards the confiscation of 12.8 MTs of Menthol Molten and 4.6 MTs of Eucalyptus Oil totally valued at ₹ 95.08 lakhs approx. seized during the Panchnama proceedings dated 23-6-2006 for non-accountal of their production in the records. Rule 10(1) of the Central Excise Rules, 2002, mandates that - every assessee shall maintain proper records, on a daily basis, in a legible manner indicating the particulars regarding description of the goods produced or manufactured, opening balance, quantity produced or manufactured, inventory of goods, quantity removed, assessable value, the amount of duty payable and particulars regarding amount of duty actually paid . In respect of such goods, Rule 25(1)(b) provides for confiscation and penalty. Therefore, confiscation of the said goods with an option for redemption on payment of fine and imposition of penalty under the said Rule 25 cannot be faulted at all. The fine imposed also cannot be said to be excessive. Therefore, we do not find any infirmity in the impugned order in respect of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agree, I record my separate order. 7.2 So far the amount of Cenvat credit taken by TYIL of ₹ 3,93,78,240/- is concerned, M/s. J.D.L. Jammu have once again deposited the said amount with interest in the course of investigation. Further in view of the special dispensation provided under Rule 12 of the Cenvat Credit Rules, 2004, the recipient unit (TYIL) is entitled to full credit of duty paid by unit (JDL) in Jammu, availing exemption under Notification No. 56 of 2002-Central Excise. The Hon ble Bombay High Court in the case of Nestle Ltd. - 2012 (275) E.L.T. 49 (Bom.) have taken the view that once duty paid by the supplier unit is retained by the department, the credit cannot be denied to the recipient unit, even though no duty was payable. The denial of credit to TYIL will result in double benefit to the Department, which is not permissible. Thus, I hold the recipient unit TYIL is entitled to take Cenvat credit of ₹ 3,93,78,240/-. Further I hold the irregularity was duly regularised. 7.3 So far penalty under Section 11AC is concerned, it is seen that the majority of the demand of duty, is found unsustainable, save and except the amount of ₹ 3.93 crore which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In view of the aforementioned pleadings and accepted position of facts I set aside the confiscation of molten menthol and Eucalyptus oil along with redemption fine imposed. 8. To sum up - (i) I agree to the deletion of Balance of duty imposed on JDL save and except of ₹ 3,93,78,240/- on the clearances made by JDL. (ii) I agree that the issue raised by the Department vide the show cause and impugned order before the Tribunal is different with respect to with earlier order of adjudication dated 31-3-2008, hence res judicata does not apply. (iii) I agree with respect to the duty imposed of ₹ 1,55,105/- for clearance, of Terpene by TYIL. (iv) Disagreeing I hold that Cenvat credit of ₹ 3,93,78,240/- is available to TYIL. (v) Disagreeing I hold that penalty under Section 11AC is not imposable on the Companies as well as its Directors. Also penalty under Rule 15 of CCR, on TYIL is set aside. (vi) Confiscation of seized molten menthol and eucalyptus oil is set aside. (vii) Penalty of ₹ 63,00,000/- imposed under Rule 25 of CER, 2002 is set aside. Sd/- (Anil Choudhary) Member (Judicial) 9. The following difference of opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 22,13,22,732/- availed by the co-applicant, M/s. Tien Yuan India Pvt. Ltd. (TYIL) and also imposed equivalent penalty under Section 11AC. Further, he confiscated unaccounted stock of menthol and eucalyptus oil which was seized, with an option to redeem the same on payment of fine of ₹ 22,00,000/- (Rupees twenty two lakhs only). Penalties were also imposed on the directors of the companies. Excise duty demand of ₹ 1,55,105/- on terpene removed without payment of duty was upheld against TYIL and equivalent penalty imposed. In his order ld. Member (Technical) upheld the demand of ₹ 3,93,78,240/- only out of the total demand of ₹ 22,13,22,732/- against JDL along with appropriate interest, upheld denial of Cenvat credit of ₹ 3,93,78,240/- to M/s. TYIL and imposed equivalent penalties of ₹ 3,93,78,240/- on JDL TYIL. The duty demand of ₹ 1,55,105/- and equivalent penalty on TYIL is upheld. Confiscation of goods with option to redeem the same on payment of fine of ₹ 22 lakhs is also upheld. The balance demands towards duty, interest and penalties are set aside. Whereas Member (Judicial), while agreeing with Member (Technical) on other dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. 129 (S.C.). He also argued that the contravention of a notification is not contravention of provisions of the Act, and since Section 11AC refers to contravention of Act, therefore, penalty is not imposable under Section 11AC. He drew attention to the fact that Member (Technical s) reliance on Orient Weaving Mills Pvt. Ltd. is misplaced because Section 38 referred to in the Judgment has since been substituted vide Section 4 of the Central Excise Amendment Act, 1973. To buttress his argument he relied on Hotel Balaji and Others v. State of Andhra Pardesh - AIR 1993 SC 1048 and Baker Grey Co. v. Union of India - AIR 1971 S.C. 116. 13.2 On the issue of confiscation under Rule 25, he stated that Commissioner has not given any reasoning for confiscation, although show cause notice proposed confiscation under Rule 25(1)(b) for non-accountal of the manufactured goods in the RG1 Register. He stated that the said Rule only takes into scope goods which are physically not present at the time of seizure. He relied on Sheet Components Pvt. Ltd. - 2005 (184) E.L.T. 148 (Tri.-Del.) and Commissioner v. Continental Chemicals - 2002 (140) E.L.T. 116. 14. The ld. Spl. Consultant appearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 14 is reproduced below : Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded. - Where the Cenvat credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or the provider of the output service and the provisions of Section 11A and 11AB of the Excise Act or Sections 73 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries . Therefore, the issue to be determined is whether TYIL had taken the credit wrongly so as to justify its recovery under Rule 14. For determining this we may refer to Notification No. 56/2002 under which the JDL Jammu Unit was operating. The paras in Notification 56/2002 which are germane to the issue are reproduced below for ease of reference Clause 2A(e) and (g) of this notification read as : (e) the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after such verification, as may be deemed necessary, shall determine the amount correctly refundable to the manufacturer and intimate the same to the manufacturer by day of the next month to the month und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount determined correctly refundable under clause (e) and not reversed by the manufacturer within the period specified therein, shall be recoverable as if it is a recovery of duty of excise erroneously refunded. The crucial words to be noted are and not reversed . A plain reading of the clause (g) clearly indicates that only when the credit availed irregularly is not reversed within the period specified, then only the same shall be recoverable as duty of excise erroneously refunded. Further, clause (g) also states that only if such irregular credit is utilized for payment of excise duty on clearances of excisable goods, the goods shall be considered to have been cleared without payment of duty to the extent of utilization of such irregular or excess credit. That is only the said goods will be treated as cleared without payment of duty for which duty payment was made from the irregular credit. And that too, if the credit has not been reversed. In the present situation, it is not the department s case that the irregular credit was utilized for payment of excise duty on clearances of excisable goods. Moreover credit has been paid back in cash. Therefore, conversely, from clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is available to TYIL the question of penalty does not arise and I hold accordingly. 17. The next issue to determine is whether M/s. JDL are liable to penalty under Section 11AC. Under Section 11AC penalty is imposable for reasons, inter alia, when duty has been erroneously refunded and is to be recovered under Section 11A. Section 11A(4) states that Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by the reason of ------------------- , a notice may be issued for recovery. Therefore it needs to be examined whether there was any erroneous refund in the present case. I find that the appellants at Jammu are working under Notification 56/2002 which is a self-contained scheme of paying duty and taking refund thereof. It has to be seen whether erroneous refund was given under this scheme. I may again refer to clause (e) and (g) of para 2A of the notification. The clause (g) states that where credit is availed irregularly and not reversed within the period specified in clause (e), same shall be recovered as if it is recovery of erroneous refund. Therefore it is to be noted that once the credit has been reversed befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty on clearances of excisable goods. In this view of the matter it has to be considered that duty was paid on the goods cleared from the Jammu Unit. For this reason also penalty is not imposable on JDL. 18. The last issue to be decided is the issue of confiscation of goods valued at ₹ 95.08 lakhs seized on 23-6-2006 at the premises of TYIL. These goods constituted 12800 kgs of Menthol Molten and 4600 kgs. of Eucalyptus oil. Rule 10 of the Central Excise Rules clearly requires maintenance of daily stock account of goods produced, quantity removed, inventory, assessable value etc. The goods seized could not have been the production of single day. This reveals the intention of the appellant. The argument of the ld. Sr. Advocate that goods not accounted for does not refer to goods which are physically present is strange . Rule 25(1)(b) states that : Subject to the provisions of Section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or a registered dealer - (a) removes any excisable goods in contravention of any of the provisions of these rules or the notifications issued under these rules : or (b) does not account for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Court on 5-11-2014) Sd/- (P.S. Pruthi) Member (Technical) FINAL ORDER 21. In view of the majority decision, the following order is passed : (i) The duty demand of ₹ 3,93,78,240/- against M/s. Jindal Drugs Ltd., Jammu under the provisions of paragraph 2A(g) of Notification No. 56/2002-C.E., dated 14-11-2002 read with Section 11A of the Central Excise Act, 1944 is upheld along with interest liability thereon under Section 11AB of the said Act. (ii) Central Excise duty demands of ₹ 1,55,105/- in respect of Terpene and ₹ 98,083/- in respect of Menthol Crystals are upheld against M/s. Tien Yuan India (P) Ltd. under Section 11A of the Central Excise Act, 1944 along with interest thereon under Section 11AB and penalty of equivalent amount of ₹ 1,55,105/- on the said firm under Section 11AC of the Central Excise Act, 1944 are upheld. (iii) Confiscation of goods valued at ₹ 95.08 lakhs (approx.) seized on 23-6-2006 at the premises of M/s. Tien Yuan India (P) Ltd., Taloja, under Rule 25 of the Central Excise Rules, 2002 along with option to redeem the same on payment of fine of ₹ 22 lakhs is upheld. (iv) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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