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2023 (9) TMI 1372 - CESTAT MUMBAIClandestine Removal - Applicability of Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - failure to file declaration under rule 6 of Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 - suppression of installed machinery - scope for any mitigating circumstances to be considered for levy under any other provision of law or to be left out of assessment or not - presumption of having commenced production on the appointed date - Recovery alongwith interest and penalties - HELD THAT:- The claim of the appellant that licence for manufacture of ‘gutkha’ had not been obtained appears to have been overlooked even though it should have been possible to have this aspect verified. Sadly, that did not happen. It was improper on the part of the adjudicating authority to assume to the contrary and to presume that either the administration of the state government was lax or that the appellant had operated outside the law with not a whiff of illegal activity coming to the public eye. No inquiry was taken up to ascertain destination of ‘impugned product’, if any, had been manufactured from deployment of machine intended for manufacture of licenced product. There is no evidence of clandestine production. There is no evidence to suggest that appellant had used available machines to manufacture ‘gutkha’ during the disputed period. The impugned order is silent about the state of affairs that prevailed prior to the Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 coming to force or any valid reason to suspect that appellant was manufacturing the product. The presumption owing to which the Rules were said to be applicable is not acceptable and the collection of tax on such assumptions is unthinkable. The appeal is allowed.
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