TMI Blog2004 (10) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... mand. (ii) I confiscate the supari seized at the premises of M/s. Ravi Kumar Co., valued at Rs. 5,88,557/- (Rupees Five lakhs eighty eight thousand five hundred and fifty seven only) and at the residence of Shri K. Shankar Rao valued at Rs. 25,125/- (Rupees Twenty five thousand one hundred and twenty five only) under Rule 173Q of Central Excise Rules, 1944. However, considering the extenuating circumstances, I give them an option to redeem the same on payment of a nominal fine of Rs. 50,000/- (Rupees Fifty Thousand only) considering the time elapsed. (iii) I confiscate the goods valued at Rs. 1,58,150/-(Rupees One lakh fifty eight thousand one hundred and fifty only) seized from M/s. Vijayalakshmi Enterprises under Rule 173Q of Central Excise Rules, 1944. However, considering the extenuating circumstances, I give them an option to redeem the same on payment of a nominal fine of Rs. 15,000/- (Rupees Fifteen thousands only). (iv) I confiscate the goods valued at Rs. 1,28,000/- (Rupees One lakh twenty eight thousand only) seized from Shri Paranthaman under Rule 173Q of Central Excise Rules, 1944. However, considering the extenuating circumstances, I give them an opti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 16-3-1995. 2. We have examined the records and heard both sides. It appears from the records that M/s. Ravi Kumar Co., were engaged in the manufacture of scented betel-nut powder which was cleared under the brand name Ajantha Sugandhi Supari . The said goods was classifiable under Sub-Heading No. 2106.90 prior to 16-3-1995 and under Sub-Heading No. 2107.00 from 16-3-1995. It appeared to the Department from the results of investigations that M/s. Ravi Kumar Co. had suppressed purchase of raw materials (arecanuts etc.) and packing materials (printed flexible plastic film laminates) and indulged in clandestine manufacture and clearance of scented supari powder. It appeared that such clearances were made to M/s. Vijayalakshmi Enterprises, M/s. Ajanta Enterprises and M/s. Murali Enterprises. On this basis, the Department issued a show-cause notice to M/s. Ravi Kumar Go. and others proposing to demand duty for the period 1-4-1994 to 11-3-1997 from M/s. Ravi Kumar Co., to confiscate the excisable goods seized from their premises as well as the premises of some of their dealers and to impose penalties on all of them. The show-cause notice also proposed to deny the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la was irrational and speculative and the demand of duty based on it was not sustainable. No empty pouche was in existence in the premises when the officers visited. What was available then was laminated plastic film rolls and not pouches. It was also pointed out that no weighment of any goods was made by the officers and that no weighing machine was available in the premises. 4. The further evidence for the Department, according to Counsel, lay in the confessional statements given by the Proprietor of M/s. Ravi Kumar Co. and their dealers. Counsel submitted that all these statements were subsequently retracted, but the retraction was rejected by the Commissioner on the ground of delay. The original statements of dealers were relied on for inferring that raw materials such as raw arecanuts were procured from them by M/s. Ravi Kumar Co. and, without accountal, used for manufacturing scented supari. Counsel argued that the statements which were subsequently retracted could not be relied on to reach a finding of clandestine manufacture of scented supari. The finding of clandestine manufacture and clearance was entirely based on assumptions and presumptions. It was argued that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue s appeal is concerned, the challenge is against the dropping of demand of duty on scented supari for the period prior to 16-3-1995 and the grant of abatement under Section 4(4)(d)(ii) to the assessee in the matter of valuation of goods. We find that the Commissioner relied on the Hon ble Madras High Court s judgement in Writ Petition No. 4265 to 4267/1994, in the case of A.R. Safullah and Others to hold that Betel nut Powder was different from Pan Masala and hence could not be classified as Pan Masala for Central Excise purpose. Betelnut Powder became excisable for the first time with effect from 16-3-1995 with insertion of a new entry for it in the Tariff. Ld. SDR has pointed out that the High Court s judgment in the above Writ Petition has been appealed against. However, in answer to a query from the Bench, it has been reported by SDR that the operation of the above judgement has not been stayed in the Writ Appeal. The decision in the Writ Petition was that betel-nut powder (supari) was not excisable. The Revenue has no case that the question of excisability of supari for the period prior to 16-3-1995 is not covered by the High Court s judgment. Therefore, in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.60p pouches in 26 bags (each bag containing 100 packets) 20 52000 (3) Re. 1/- pouches in 102 bags (each bag containing 60 packets) 35 214200 (4) 0.20p pouches in 16 bags (each bag containing 300 packets) 5 24000 (5) Rs. 2/- pouches - 30 packets 70 2100 Total 588557 The officers then identified the goods listed above as those goods which were detained by the Central Excise Officers on 12-3-1997 by verifying the number of bags with reference to the contents and denominations of each individual bag. The value of the goods is Rs. 588557/-. On the reasonable belief that the goods listed in this Mahazar were intended to be cleared without payment of duty, the said goods were seized under the relevant provisions of the Central Excise Act/Rules, 1944. No other goods other than those listed in this Mahazar was seized. The officers then went round the factory and found the following denominations of pouches. The officers verified the pouches with reference to its individual weight filled/empty, and also verified the output of each individual denomination of pouc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 11-3-1997 is concerned, there is no evidence whatsoever, whether it be one of procurement and utilization of raw material or of production and clearance of supari out of the factory or of sale of such goods to show that the assessee had clandestinely manufactured and removed supari during the said period. Hence we are unable to sustain the demand of duty raised by the Commissioner on M/s. Ravi Kumar Co. for the period 1-4-1995 to 11-3-1997. The Tribunal s decision in Ghodavat Pan Masala Products (supra) is squarely in support of this view. In that case, a demand of duty raised on the assessee by the Department on the basis of certain theoretical calculations of pouches generated per kgs. of printed laminated roll was set aside by the Tribunal. The facts of the instant case are also more or less similar to those of Ghodavat Pan Masala Products (supra). The Department worked out an unintelligible formula for assessing alleged clandestine production and removal of scented supari pouches presumably on the basis of weighments of laminated plastic rolls found in the factory. There is no dispute of the fact that the manufacture of supari in pouches is a wholly mechanised process in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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