TMI Blog1998 (7) TMI 393X X X X Extracts X X X X X X X X Extracts X X X X ..... chased from its manufacturer the concentrates which is referred to as non alcoholic beverage base (NABB) which when mixed with syrup, water citric acid and carbonated, gives the drink being manufactured its colour, flavour and other characteristics that render it unique. M/s. Parle Beverages one of the appellants, also manufactures during the relevant period some of the NAAB. Each appellant is a franchisee and has licence from the owner of the trade mark to manufacture particular branded beverages. The manufacturers of the NABB prescribes a formula according to which it requires that the beverages will be manufactured. The formula contemplates use of specified quantities of NABB and other raw materials in order to arrive at a given quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch duty have not been taken into account. It is not permissible to demand duty only on the basis of a consumption of a single raw material without consideration of whether other raw material has been used of the extent required. The action of the Commissioner in determining the production on the basis of raw material amounts to invoking the provisions in Rule 177E which cannot be resorted to unless the requirements specified in that rule have been complied with. Duty cannot be demanded on clandestinely removed goods unless such removal is established by means of evidence. It was argued in addition on behalf of Voltas that there was no allegation that there has been any payment by the bottlers to the supplier of NABB. It was further contend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... technically not possible to achieve for the formula because it does not provide for wastages caused during start up and shut down and on account of substandard production. R.P. Mugale, Chief Executive of Parle, takes the same stand. C.G. Hegde an employee of Parle International, another franchisee also states that the yield of 400 crates in the formula is theoretical. The same view is expressed by R.N. Ranade the Production Manager of Voltas. The exception is of Krishnan, the Production Manager of Thums Up who says that it is the bounden duty of the franchisee to achieve the production of 400 cases. He however, also says in the same statement that we try our best to achieve our target on fixed norms of 400 crates . Now a statement of one m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent referred to as the M. 5 statement which was being prepared by the manufacturer. 8. The M.5 statement was among the documents which was seized from the appellants premises. In the written submissions submitted to the Commissioner after the hearing referring to the question asked by the Commissioner about the records of wastage, the appellant pointed out that the M.5 statement seized on 1-2-1994 contained details of only some of the process wasted particularly, half filled bottles. In this situation the conclusion that wastage has been taken into account cannot be accepted. 9. The position is different in the case of Voltas. The notice did not provide for wastage of any quantity. The Commissioner declined to accept the contention tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead rubber and no investigation has been done in regard to the use of other materials to ascertain whether the quantum of other raw materials used could be such as to result in additional production of tread rubber by using the alleged short quantity of 1000 Kgs of reclaimed rubber. These decisions and others reiterate the principle that clandestine removal cannot be established only on the basis of one raw material alone. 11. It appears to us that the Rule 173E requires the following to be done. The officer duly empowered by the Commissioner has to fix a quantum of goods produced in a period when production in a particular factory is considered normal having regard to the factors specified in the rule. This shall be the norm. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capable of being so interpreted . This observation does not support the view that production can be determined on the basis of one raw material alone, as has been done in this case. The Court in coming to its conclusion took note of the fact that the accounts were found fabricated and untrue. There is no such allegation here. 12. The position in Standard Pencils P. Ltd. v. C.C.E. - 1996 (86) E.L.T. 245 as follows. The Collector had determined the quantity of eyebrow pencils manufactured on the basis of formula mentioned in MICAL Test Register and the quantity of four essential raw materials. Before the Tribunal the appellant accepted these norms. Tribunal ordered that the quantity of eyebrow pencils removed without payment of duty be wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
