9911796707
TMI Blog2001 (3) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... 1992-1993, the Tariff Rate of 225% ad valorem was introduced. (c) The appellant buys unmanufactured leaf tobacco from outside sources, and despatches the same to the Company's cigarette factory in Azamabad, Hyderabad. At the cigarette factory, the unmanufactured tobacco is processed into cut tobacco after blending and cutting at the Primary Manufacturing Department. (d) This cut tobacco is then issued to the cut Tobacco Stores where it is normally stored for about 24 hours. (d.1) Cut Tobacco from the Cut Tobacco Stores is then issued to the Cigarette Making Department for being made into cigarette sticks in the cigarette making machines. While the cigarettes are made in the cigarette making machines, certain quantity of cigarette sticks get wasted and are generated as waste cigarettes in the cigarette making machines. Further, certain quantity of dust and sand from the cut tobacco is also generated and collected in the Dust Recovery Units. Certain quantity of tobacco dust/sand gets mixed with the atmospheric air and is lost since it cannot be collected in the dust recovery units. The cigarette making machine also filte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sionerate by her common order being Order-in-Original No. 18/2000, dated 31-2-2000 without even dealing with any of the evidences placed before her confirmed the demand in all the seven show cause notices under Rule 9(2) read with proviso to Section 11A(1) of the Act on cut tobacco and imposed mandatory penalty for an equivalent amount under Section 11AC of the Central Excise Act read with Rule 173Q and ordered payment of interest at 24% per annum with effect from 1-11-1993, under Section 11AB. 2. The grounds taken in appeal are :- (a) that the entire case based on comparison and 'variance' is based on registers and formula declared by the appellant as per Departmental manual instructions which were under constant scrutiny and verification of the Departmental authorities. Therefore, the present SCN has been made out only a hypothetical basis of non-accountal and consequent assumed clandestine removal of cut-tobacco; (b) there was no requirement under the said Notification viz. 355/86 and 121/94 to declare any specification of weight or that cigarettes should be made as per the declared formula only to entitle eligibility of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of this Act or Rules" are again qualified by the immediately following the words "with intent to evade payment of duty". It is, therefore, not correct to say that there can be a suppression of mis-statement of fact, which is not wilful and yet constitutes a permissible ground for the purpose of the proviso to Section 11A. Mis-statement of suppression of fact must be wilful". And submitted that there is no suppression or mis-statement in the present case and overruled decision of the Tribunal relied upon by the Commissioner would not be correct law; (j) The findings of the Commissioner that there can be only positive variance is not correct decision which is arbitrary since variance can be positive or negative; (k) Ld. Commissioner has failed to fix and arrive at the tolerance levels due to various factors and has confirmed a demand on the basis of conjuctures. There was no material to prove allegation of clandestine removal and the allegation of concocting of the records is a serious allegation made without any basis and it cannot be upheld in a physical control system as held by the Tribunal in the case of Leather C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication of any declared formula from the weighed Tobacco Consumption to rolling of cigarettes, or in reverse, i.e. by obtaining the tobacco from rolled cigarettes, by slitting and weighing the same, was conducted. To a question from the Bench, it was submitted that the Anti Evasion officers on the surprise visit, did not find any unaccounted stock/stores/stash of cut-tobacco nor did they conduct any physical verification of the formula as prescribed by the manual to arrive at 'normal working difference' was done. When we find that the procedure established by law, vide the manual to determine the 'normal working difference' i.e. variation between the theoretical and actuals has not been complied with, then we cannot find 'variance' being alleged to be abnormal. These proceedings, therefore initiated and continued are having no foundation. (b) from the total quantity of cut-tobacco, over a period of the demand, which is found to have been removed without using the same in the manufacture of cigarettes as alleged it would appear that large quantities of unaccounted tobacco were being generated and or removed. Since the Anti Evasion Officers have visited the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvoking proviso to Section 11A(1) was issued in this case. We find that the fact of 'variance', was a well known fact to the Department all over the Cigarette industry including the appellants' factory premises. Therefore in the facts of this case, we do not find any reason in the SCN before us to invoke proviso clause to Section 11A(1). We, therefore, find that the show cause notice to be barred by limitation. (d) Appellants have relied upon the following decisions :- (1) CEGAT's order in M/s. ATC case-Order No. 370/1991, dated 5-6-1991 [2000 (123) E.L.T. 536 (Tribunal). (2) C.C.E., Allahabad v. Tirupati Cigarettes - 2000 (121) E.L.T. 81 (T) of various authorities which also persuade us to come to a conclusion that when the Anti Evasion Officers have not fixed after arriving at any 'normal working difference' as per the procedure established by law, relying upon these case-law and on merits, we cannot find any case for confirmation of demand as made out by ld. Commissioner. We find that ld. Commissioner has relied upon the (statements of various persons but has not relied upon the) cross examination of the deponent of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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