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2022 (9) TMI 126 - AT - Central ExciseClandestine manufacture and removal - chewing tobacco - cross-examination of various persons - applicability of Compounded Levy Scheme - extended period of limitation - HELD THAT:- Section 3A of the Act read with the Chewing Tobacco Rules is a complete code in itself. It provides for the detailed procedure for determination of duty on the basis of capacity of production. Further, the said Rules also provides for detailed procedure for determination of duty payable and also provides for penalty in case of violation or mis-declaration by the assessee. It also provides that if any undeclared packing machines are found by the Department, the manner of determination of duty on such machines and the penalty imposable. Admittedly, in the facts of the present case, Revenue have not found any undeclared machine(s) in manufacturing premises/ factory. Further, no such undeclared machine(s) was found at any undisclosed premises. It is further found that duty has been demanded on the basis of assumptions and presumption, which is not permissible under the scheme of compounded levy on the product manufactured by the appellant. The appellant have regularly filed declarations for capacity determination under Rule 6(1) of the Chewing Tobacco Rules, and the said declarations were adjudicated upon and duty payable determined (assessment order) by the Adjudicating Authority. Such adjudication orders have attained finality, as these have not been appealed against by the Department - the factory of the appellant was regularly visited from time to time by the Officers of the Department and they have never found any undeclared packing machine being operated by the appellant. In the facts and circumstances (Compounded Levy Scheme), undisclosed income declared before the Income Tax Department has no bearing on the duty payable under Central Excise Act. Further, it is undisputed that the amount of Rs.92,14,154/-, which was voluntarily offered to Income Tax and was confirmed in the Assessment order as undisclosed income, on appeal by the appellant, the ld. Commissioner of Income Tax (Appeals) vide Appellate Order dated 05.10.2016 have set aside the said amount - the appellant has given a cogent explanation with regard to the sheet/ survey report found from the premises of Sh. Purohit, which have been arbitrarily rejected by the Adjudicating Authority. Extended period of limitation - HELD THAT:- The invocation of extended period of limitation is bad and not available to Revenue, as no case of `suppression or contumacious conduct is made out. Appeal allowed - decided in favor of appellant.
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