TMI Blog2013 (12) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... taking the consent indicated that there was manufacturing of only Khandsari Sugar and nowhere had it indicated that there was intention to manufacture White Sugar - All these evidences which were on the file were over looked by the adjudicating authority while coming to a conclusion that appellant had manufactured White Sugar and not Khandsari Sugar - the appellant had in fact, in the application made to GPCB indicated that there was cooling pan in the ATP unit of the appellant - there was nothing on record to indicate that cooling pan which was there in the factory premises of the appellant when they applied for consent from GPCB or can be used with machineries like vacuum pressure pan. The appellant had produced various certificates from the purchasers of Khandsari Sugar during the material period - the purchasers have specifically stated that they were regularly procuring Khandsari Sugar from the appellant and were also dealing in sugar from various manufacturers - The certificates specifically note and record that the purchases made from the main appellant SGSI were of Khandsari Sugar – the attitude of brushing aside of evidence produced by the assessee in his support is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the visiting officers found that appellant during the period 2002 to 2005 have, allegedly, manufacture white sugar on which duty is liable to be discharged but cleared the same as Khandsari Sugar claiming exemption. Investigating officers also noticed that there was machinery like Vacuum Pan which was found during the visit which was utilised for manufacture of white sugar. Coming to such a conclusion, show cause notices were issued to all the appellants herein. The said show cause notice directed the appellants as to show cause why there should not be demand of duty on the clearances of white sugar for the material period, interest thereof and penalties on the appellants, besides proposal for confiscation of the goods seized during the visit; show cause notice also proposed for demand of duty on the Molasses during the relevant period. The appellants contested the show cause notice on various grounds including seeking the cross-examination of the persons who made statements and also on the evidences of licenses given to the appellants. It was the submission of the appellant before the adjudicating authority that they had in fact, plan to manufacture white sugar on which duty liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akh only) on Shri Sadanad Zervar, Partner of M/s. SGSIK, Anand Bhavan, Pardeshi Pura, Nandurbar -425412, Maharashtra under Rule 26 of Central Excise Rules, 2002. (vii) I impose penalty of Rs. 10,00,000/- (Rupees ten lakh only) on Shri Devendra Pardeshi, Partner of M/s. SGSIK, Anand Bhavan, Pardeshi Pura, Nandurbar- 425412, Maharashtra under Rule 26 of Central Excise Rules, 2002. (viii) I impose penalty of Rs. 10,00,000/- (Rupees ten lakh only) on Shri Prithviraj G. Raghuvanshi, Partner of M/s. SGSIK, Anand Bhavan, Pardeshi Pura, Nandurbar- 425412, Maharashtra under Rule 26 of Central Excise Rules, 2002. Aggrieved by the above said order, all the appellants are before us. 4. Learned counsel appearing on behalf of all the appellants would submit that the adjudicating authority has erred in coming to such a conclusion. It is his submission that the appellant SGSI were registered with the Government of Gujarat as manufacturers of Gur and Khandsari Sugar. He would draw our attention to the licenses issued by the Director of Sugar, Government of Gujarat which indicates manufacturing license for Gur, Khandsari Sugar and Molasses. He would also draw our attention to the licenses is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured Khandsari Sugar. It is his submission that the adjudicating authority has also violated the principles of natural justice by not granting any cross-examination of the witnesses whose statements were relied upon. It is his submission that Chartered Engineer was also summoned by the officers of DGCEI and statement was recorded on 12.04.2005 wherein he had stated that the test reports were incorrect. He would submit that the said Chartered Engineer by an affidavit dated 14.4.2005 has retracted the statement given and the said affidavit has been forwarded to the adjudicating authority which has not been considered. It is further submission that reliance placed by the adjudicating authority on the statements of the manufacturers of vacuum pan is also incorrect, inasmuch as, the supplier of the machinery was some other company and statement is recorded of another company with whom the appellant had no business transactions. He would rely upon the various case laws and more specifically on the decision of the Vishwa Traders -2013 (287) ELT 243 (Guj.), wherein the Hon ble High Court of Gujarat specifically stated that there needs to be corroborative evidences of clandestine ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this is an evidence which has been created subsequent to the visit of the authorities and cannot be considered as an evidence. It is his submission that though there was an application made by the assessee for registration as a manufacturer of White Sugar on 05.01.2005, it is the case of the Revenue that they had in fact found that appellant was manufacturing and clearing White Sugar in the guise of Khandsari Sugar. It is his submission that impugned order be upheld and appeals be rejected. 6. We are given anxious consideration to the submissions made by both sides and perused the records. 7. The entire demand of duty is based on the findings that the appellant SGSI had manufactured White Sugar during the period 2002 to 2005. 8. At the outset we would like to record that the appellant had unrecorded 3500 quintals of White Sugar found during the visit of the investigating officer, which has not been disputed and the confiscation ordered for such goods needs to be upheld as there was no accounting of the said White Sugar in the records. We uphold the confiscation of the said White Sugar as White Sugar is liable to duty, considering the facts and circumstances in this case, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about testing of open pressure pan in the factory premises of the appellant for the period. It also indicates that said open pressure pan was not insulated. The said certificates up to 2004 were of open pressure pan. We find that from the year 2005, the said Form No. 11 specifically talks about vacuum pans which were insulated vessels and undisputedly can be used for manufacture of White Sugar. If the appellants factory did not have vacuum pan during the period 2002 to December 2004, we are unable to understand as to how the appellant can manufacture White Sugar. This evidence has been totally over looked by the adjudicating authority and hence the findings that the appellant were manufacturing White Sugar from 2002 to 2005 seems to be incorrect and misdirected. 10. Secondly, we find that DGCEI officers had sought the help of GPCB directing them to give Photostat copies of applications made by SGSI while taking consent from them for setting up a plant. On perusal of the said application of applicant SGSI, we find that form D which was filed by the appellant to GPCB in the year 1999 specifically indicates that they had intention to manufacture only Khandsari Sugar. The said app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the specification of Khandsari Sugar. The goods which are found on the day of visit specifically indicate that there was Khandsari Sugar, the adjudicating authoritys order of demanding duty on the Khandsari Sugar is incorrect as there is no dispute that Khandsari Sugar is not dutiable. We find that the adjudicating authority has over looked the evidence of the analysis of the samples which were tested by Vasantdada Sugar Institute on the samples which were sent by DGCEI officers. 12. Fourthly, we find that appellant had produced various certificates from the purchasers of Khandsari Sugar during the material period. On mere perusal of the said certificates, which were produced before us to day and was produced before the adjudicating authority, we find that the purchasers have specifically stated that they were regularly procuring Khandsari Sugar from the appellant and were also dealing in sugar from various manufacturers. The said certificates specifically note and record that the purchases made from the main appellant SGSI were of Khandsari Sugar. We find that adjudicating authority has simply brushed aside this evidence by recording that this was an after thought and fabricate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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