TMI Blog2015 (10) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... red to certain opinions or statements that it was possible to fill the exact weight since packing process was automatic but it completely overlooked the fact that the appellants themselves had stated that they were over-filling a little quantity of carbon black in excess of the standard weight so that there may not be any complaint from the purchasers for receiving lesser quantity of carbon black which sticks with the packing bags. This factual aspect of non-receipt of any additional consideration had neither been denied nor could be disproved by the respondents. The Tribunal completely ignored its own observation recorded in para-7 of its first final order dated 19.10.2000 that where the assessment is linked to value, the realisation of the price is the same even if packed quantity is slightly more than the quantity projected then this would not have any revenue significance. - impugned Final Order of the Tribunal dated 19.10.2004 cannot be sustained and is hereby set aside. To do justice, the matter is remitted back to the Tribunal - Decided in favour of assessee. - Central Excise Appeal No. - 31 of 2005 - - - Dated:- 14-10-2015 - Hon'ble Tarun Agarwala And Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter to Adjudicating Authority for de-novo adjudication and as such, all the points were open for determination, but by the impugned Final Order No.103 to 105/05/NB (A), dated 19.10.2004 passed in Appeal No.E/3441-43/04-NB (A), the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as ''the Tribunal') arbitrarily and incorrectly dismissed the appeal of the appellants on the ground that findings regarding removal of excess carbon black were confirmed in the earlier Final Order of the Tribunal dated 19.10.2000 and the matter was remanded for limited purpose to examine the trade practice of slightly over-filling carbon black. He further submits that the finding of the Tribunal with regard to trade practice of over-filling of bags in respect of carbon black being without any material is incorrect. The adjudicating authority neither confronted the assessee with the alleged inquiry report regarding trade practice of overfilling nor afforded opportunity to rebut it. He submits that the excise duty has been paid on ad valorem basis and the packing material was in addition to the weight of carbon black. The nature of carbon black is such that it sticks w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which duty is payable on ad valorem basis. Central Excise Officers visited their factory premises on 30.05.1996. On physical stock taking of the finished goods and raw material, certain discrepancies were found and certain records were also resumed including a file containing date-wise loose sheets indicating the tank level of carbon black during the year 1996-97, which was found at variance with the physical stock vis- -vis the balance as per books. Similar sheets were also found in another file covering the period of the year 1994-95. A show cause notice, after due investigation, was issued to the appellants, and thereafter an Order in Original No.01, dated 05.01.1999 confirming demand of central excise duty of ₹ 85,57,626/- under Section 11A of the Central Excise Tax (hereinafter referred to as ''the Act') and imposing penalty of ₹ 85,57,626/- was passed. Penalty was also imposed under Rule 209A of the Central Excise Rules, 1944 (hereinafter referred to as ''the Rules'). Being aggrieved the appellants preferred Central Excise Appeal No.E/832-34/1999-NB before the Tribunal, which was disposed of by Final order No.A/907-909/2000-NB (DB), dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been included in the quantity of loose carbon black found in silos. Besides, it is observed that the invoices raised by the party reflected the weight of paper bags i.e. packing material in addition to the weight of carbon black. Therefore, if the contention that the total excess quantity included the weight of the standard excess weight of the carbon black and the packing material is correct then the sum of the weight of the packing material and the weight of carbon black, should conform to the total quantity removed, which, however, is not the case. Based on these facts, the Commissioner has arrived at the conclusion that the quantity over and above the standard excess quantity as mentioned in the show cause notice was not the weight of bags and wagon liners but was that of carbon black. The Ld. Counsel for the appellants has not been able to counter these findings with any plausible explanation and therefore, we find no infirmity in it. We accordingly confirm these findings. 7. The other point raised by the appellants is that the duty on carbon black is on ad valorem basis. The department had conducted investigation with one of the purchasers namely Modi Tyres who had c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eared by them on payment of duty during the material period. The Commissioner will thereafter verify these figures and allow the relief to the party to the extent admissible with reasons. The quantum of confirmation of duty, if any, and penalty on all of the appellants should thereafter be adjudged in the light of the relief allowed to M/s OCCL. The appellants should be afforded a reasonable opportunity of personal hearing by the adjudicating authority. 8. From the above quoted first Final Order of the Tribunal, dated 19th October, 2000, it is clear that two points were raised by the appellants before the Tribunal. The first point was with regard to the excess quantity of carbon black, which was decided against the appellants and the finding of the Adjudicating Authority in this regard was upheld in paragraph-6 of the order. The second point raised by the appellants was that the duty on carbon black was on ad valorem basis and they had not received any excess amount for excess quantity of carbon black, therefore, even if the quantity packed was slightly more than the quantity projected yet it would not have any revenue significance. The Tribunal found force in the second submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbhu Shah-warehouse incharge dated 13.04.1998 (RUD7). Before the Tribunal, the assessee raised several contentions including the violation of principles of natural justice by the Adjudicating Authority by not affording any opportunity against the alleged inquiry reports. We find from perusal of the order in original that the Adjudicating Authority neither confronted the assessee with the alleged inquiry report nor afforded any opportunity to rebut it. In para-6 of the impugned order the Tribunal observed that the assessee has not countered the aforesaaid two inquiry reports by bringing any material/ evidence to show that there exist a trade practice of overfilling. The Tribunal noted the contention of the assessee in para-2 of the impugend order that copies of the aforesaid two reports were not furnished by the Adjudicating Authority which was not even denied by the Department. Thus, we are of the view that the order in original was passed in violation of the principles of natural justice. 12. With regard to the point No.(ii) as noted in para (9) above, we find that the Adjudicating Authority held in para 7.4.4. and para 8.1 that the excess quantity shown in the show cause notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er find that in remand proceedings, the Adjudicating Authority passed the Order in Original No.07, dated 31.03.2004, observing in paragraph-5.2 that The case is now under de-novo adjudication proceedings before me. In paragraph-6, the Adjudicating Authority noted the submissions of the appellants including the submission that the excise duty on carbon black had been paid on ad valorem basis. No evidence was brought on record by the Department that the appellants had received any amount as additional consideration in respect of overfilled excess quantity of carbon black. 14. It is not the case of the respondents that the report of investigation conducted by the department with one of the purchasers, namely, M/s Modi Tyres, who confirmed that no excess amount was paid for the excess quantity, was not on record. In the Order in Original passed pursuant to the remand direction, the Adjudicating Authority could neither place any evidence nor could record any finding that any excess amount for the excess quantity of carbon black was received by the appellants. The Adjudicating Authority merely referred to certain opinions or statements that it was possible to fill the exact weight s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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