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2017 (7) TMI 759 - CESTAT KOLKATAClandestine manufacture and removal of Pan Masala - Held that: - the whole case of clandestine manufacture and clearance based on certain private records and recovered from the premises of third party, cannot be sustained in absence of any cogent corroborative supporting evidences. Excess clearances of dutiable pan masala over and above the declared quantities - Held that: - the said fact has been admitted not only the main appellant, but also by various dealers, who dealt with the said items - the admitted facts corroborated by the dealers indicated to the evidence of un-accounted clearance of excess amount of pan masala pouches over and above recorded quantity. In such situation, it is for the main appellant to establish with supporting evidence to the effect that since when such practice was in vogue. It appears that in case of admitted fact corroborated by the dealers, the appellant is trying to restrict the duty demand by asserting that such clearance of excess pouches were only after 2003 - the duty demand of ₹ 3,93,857/- calculated based on evidences recorded during investigation is sustainable against the main appellant. Penalty equivalent to such amount in terms of Section 11AC is also sustainable. Confiscation of 49 bags of pan masala found in the factory premises of the main appellant - confiscation on the ground that the same are not duly accounted for and were intended for clandestine manufacture later - Held that: - the original authority held that the duty paid clearance of such goods earlier could not be linked with the seized goods and accordingly, he held that these were non-duty paid items. When the products was stated to be damaged items, the question of their marketability as excisable goods has to be examined. The same has not been done by the original authority. He made a summary conclusion that the duty paid nature of the said product has not been established. We note that if the product is not fit for market, the duty paid nature or otherwise of the same is of no relevance. Accordingly, we hold that the confiscation ordered on the above two items is not legally sustainable. Penalty u/r 26 of CER, 2002 - Held that: - the case for non-duty paid clearance, the main appellant is penalized under Section 11AC, which is equal to the duty amount. The main appellant is proprietorship firm. There is no separate identity for the proprietor from the proprietory firm. As such, we find no justification for imposition of additional penalty on the proprietor under Rule 26. Appeal allowed - decided partly in favor of appellant.
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