TMI Blog2000 (8) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Central Excise Rules, 1944 (hereinafter referred to as the 'Rules'), and the cut tobacco obtained as a result of ripping of sorts and broken cigarettes known as making waste. It was alleged in the show cause notice dated 18-2-92 and show cause notice dated 24-8-95 that the factory had not accounted for during the period 1-12-94 to 31-7-95, 24,941 kgs. of cut tobacco. Central Excise duty of Rs. 6,50,296.36 was confirmed by the Asstt. Collector of Central Excise, Varanasi under order-in-original dated 22-5-96. On appeal, the Commissioner of Central Excise (Appeals), observed that the shortage attributed to the weight of tissue paper in accounting of the cut tobacco issued for manufacture, was based on approximation and further, that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled cigarettes. For manufacturing cigarettes, they were obtaining cut tobacco at concessional rate of central excise duty under exemption Notification No. 356/86-C.E., dated 24-6-86, as amended, under the procedure set-out in Chapter X of the Rules. During the course of manufacture of cigarettes, some cigarettes of irregular length or size called 'sorts', and broken cigarettes are obtained along with the cigarettes of standard sizes. These sorts and broken cigarettes known as making waste were ripped open to retrieve the tobacco, which was further re-cycled for manufacture of cigarettes. The making waste included the weight of tissue paper, which was deducted for re-accountal of retrieved tobacco. The allegation against the manufacturer wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31-12-91 was not of such a magnitude as to substantiate the allegation of illicit removal of cut tobacco. Similarly loss of 387 kgs. during 1-7-94 to 30-11-94 and a loss of 1058.16 kgs. during 1-12-94 to 31-7-95 could not be considered as beyond the normal. 6. The appellate authority had recorded that the unseen loss was of 0.50%, 0.45% and 0.48%, which was within the permissible limit. 7. In the supplement to the Manual of Departmental instructions on excisable manufactured products - Cigarettes (corrected up to 31-12-84), it is provided in para 41B(d) that ripping of returned cigarettes and collection and weighment of tobacco, paper and refuse must be supervised by the Factory Officer, who must check the accuracy of the figures to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the manufacture of cigarettes is well ascertained by weighment at the time of the initial issue of cut tobacco for manufacture. The submission made by the respondents in this regard are summarised at page 5 of the order-in-appeal. The tobacco lost could not be used in the manufacture of cigarettes. The paper, dust, etc. could not be made use of for the purpose. Their taking into account in the absence of any evidence to the contrary could not be justified. What is the meaning of the word "Lost"? According to the Webster's Third New International Dictionary, the word "loss" means "the act or fact of losing, failure to keep possession, deprivation, theft of property". In the same dictionary, the word "lost" is defined as meaning not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect cannot be nullified by an interpretation placed on the second condition. Both conditions must be so read as to give full effect to the clear language of the first condition. The emphasis in this behalf upon Rule 196 in the first order of the Tribunal appears to us misplaced. Rule 196 says that if any excisable goods obtained under Rule 192 are not accounted for as having been used for the purpose and in the manner required, full excise duty thereon is payable. It does not appear to be correct to hold, as the Tribunal did in the first order, that this meant that it was requisite that it should be proved that the raw naphtha had been actually used in the manufacture of fertilizer. In the context, what was required to be shown was that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) had not contradicted these submissions made by M/s. Jaiswal. He had disposed of the submissions in the following manner :- It is seen that the appellants obtained molasses under concessional rate of duty under Rule 192 but the molasses received as such were not duly accounted for as having been used for the purposes and in the manner stated in their application for procurement of molasses at concessional rate and subsequent manufacture of cattle feed. Further, the appellants had failed to put forth any counter in allegation made by the Deptt. 9. On careful consideration of the matter, we find force in the arguments advanced by M/s. Jaiswal was that the full quantity of molasses had been duly received in their factory and ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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