9911796707
TMI Blog2011 (4) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... in the factory along with time of shift. Further, the assessees were required to maintain a record of shifts run and the stock of main input like Beetul Nut, Tobacco and packing material etc. Any violation in compliance with the above instructions attracted penal action as provided under the law. 2. In terms of above circular, the appellants filed an intimation dt.7.9.07 with the department, declaring the number and price of the packing machine in the factory. The average production was declared by them as 3300 pouches per machine per hour. Inasmuch as the actual production of the appellant as reflected in their ER-1 return filed during the period from 7.9.07 to 30.06.08 did not match with the average production reflected by them in the above declaration, Revenue entertained a view that the appellant has not accounted for full production of Gutkha in their record and has thus paid less duty. Accordingly, investigations were initiated against the appellant and a statement of Shri Sunrendra Chhajer, Proprietor of the appellant was recorded on 10.09.08. The proprietor of the unit explained the reasons for less production and stated that as the machines were very old and not ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 came into effect. As such, the duty could not be paid on the basis of number of machines installed in the factory, which was introduced w.e.f. 1.7.08 and no duty can be demanded from them on the basis of average production declared by them for the period prior to 1.7.08. They also submitted that their unit was visited by Central Excise officers of DGCEI on 15.11.07, who checked the physical stock. For the purpose of checking, the production was stopped in the factory. However, no discrepancy was noticed by the officers either in the record maintained by them or in respect of change in speed of the machines etc. They further contended that in the absence of any allegations that the appellant has not actually manufactured the excess quantity and has cleared the same out of their factory, no duty can be demanded from them on the basis of average production declared in the declaration filed by them. The performance of the machines is not uniformly good or uniformly bad and the human element plays a significant part in the production of the above goods. They drew attention of the adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary. He also submit that the circular dt.7.9.07 was probably a pre-exercise by the Government for subsequently introducing Compounded Levy Scheme, based upon the number of packing machines installed in the factory w.e.f. 1.7.08. He clarified that with effect from said date, the duty on Gutkha was fixed at Rs.12.50 lakhs per machine per month. However, the period in the present appeal is prior to 1.7.08, when the duty was still payable on ad-valerom basis. There is nothing in the said circular to reflect upon the fact that the duty was required to be paid on the declared capacity. It was still payable on the basis of actual manufacture and any charges of clandestine removal are required to be made on the basis of evidences. He submits that there being no evidence on record even admitted by adjudicating authority, who had not invoked the provisions of Section 11AC for imposition of penalty, the impugned order is required to be set aside. 7. Countering the arguments, the learned SDR submits that as the appellants have themselves declared the average production of 3300 pouches per machine per hour, it was for them to establish as to how such declared production could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal pronouncement to state that the charges of clandestine removal being quasi-criminal and serious charges are required to be proved by production of positive and tangible evidences. The inferences drawn on the basis of calculations cannot be made the basis for fastening of charge of allegation of clandestine removal. Reference in this regard made to often relied upon decision of Hon'ble Supreme Court in the case of M/s Oudh Sugar Mills Ltd. Vs. UoI as reported in 1978 (2) ELT (J 172) (SC). Further reference made to Tribunal s decisions in the cases of M/s Biharji Manufacturing Pvt.Ltd. Vs. CCE Delhi 2005 (186) ELT 587 (Tri-Del), M/s Klene Packs Ltd. Vs. CCE Bangalore 2009 (94) RLT 474 (CESTAT-Ban.), M/s Durga Trading Co. Vs. CCE 2002 (148) ELT 967 (Tri), M/s Nutech Polymers Ltd. Vs. CCE Jaipur 2004 (173) ELT 385 (Tri-Del.) 10. Further, the Hon'ble Supreme Court in the case of J.A. Naidu Vs. State of Maharashtra as reported in 1983 (13) ELT 1611 (SC), has held that the suspicion, however grave, cannot take the place of proof. In the present case, we do not even find any suspicion against the appellant inasmuch as even according to the Revenue, their case is primarily and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can made to Tribunal s decision in the case of M/s PCL OIL & Solvents Ltd. Vs. CCE Vapi as reported in 2009 (93) RLT 176 (CESTAT-Ahmd), wherein the Tribunal has observed as under: The charges of clandestine activities cannot be upheld on the basis of theoretical input-output norms. The same are required to be corroborative by production of independent evidences. Examining the case file from the above angle, we find that apart from the input-output ratio, which has been made the basis, there is no other evidences on record to show that the appellant either did not receive the raw materials, on which they have taken the credit or after receiving the same and availing the credit, the same stand removed by them in the open market. The statements given by the Director, Production In-charge and Lab. Assistant refer to the normal consumption of raw materials for production of one batch of their final product. There is no admission in the said statements to the effect that the raw materials were not actually received by them and they were showing excess consumption of the raw materials to accommodate such non-receipted raw materials. There is also no admission in the said statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
