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2018 (7) TMI 1278 - AT - Central ExciseClandestine manufacture and removal - Pan Masala - appellant was neither registered with the Central Excise Department nor was paying any duty on the clearance of Pan Masala - Interpretation of statute - Rule 17(2) of CER - Held that:- As per the rule, if the manufacturer is found to be indulging in manufacturing activities without registration on the day of their visit, it has to be deemed as if such manufacturing activity was taking place right from the first day of April of that Financial Year in which unit was found to be not registered - Admittedly in the present case the unit was found to be not registered on 10/04/2011. As such by strict application of the said rule, the duty liability would arise against the appellant with effect from first day of April, 2011 and not first day of April, 2010. There is exception in the said rule itself to the effect that unless evidence to the contrary is provided to the satisfaction of the Central Excise Officers. This shows that if an assessee is otherwise is in a position to establish actual date of stock of manufacture, the deeming provisions would not apply. It, thus, simplicitor leads us to hold that if the evidence is available on record to show the actual period during which production and clearance of Pan Masala had taken place, duty would be confirmed from that date only - Deeming provision is applicable in those cases where there no evidence of start of production is available. In the present case, the Commissioner has accepted that the appellant was indulging in manufacture and clandestine clearance of Pan Masala since January, 2011. There is also evidence on record to show that there was agreement between the appellant and their brand owner, Shri Sunil Kumar Agarwal, Director of M/s Astha Fragrance Pvt. Ltd. which was executed with effect from 01/10/2010 and the present premises in which the machines were found to be installed were taken on rent by the appellant from January, 2011 as per the statement of the owner of premises. As such, it is clear that the appellant was manufacturing the said goods in rented premises with effect from January, 2011 - the duty liability is legally to be confirmed against the appellant from January, 2011. Penalty - Held that:- The appellant was admittedly indulging in clandestine activity for manufacture of Pan Masala and as such are liable to penalty of identical amount - matter remanded back to the Original Adjudicating Authority for quantification of exact amount of duty liability against the M/s Taj Products for the period of actual manufacture of the goods and for imposition of penalty. Penalty on Shri Sunil Kumar Agarwal - Held that:- There is no evidence on record to suggest that the said activity was in the knowledge of Shri Sunil Kumar Agarwal. In such a situation, the owner of the brand name cannot be, held liable to penalty - penalty set aside. Appeal allowed in part.
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