TMI Blog2017 (8) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... n they have also stated that the statements were recorded under pressure by the officers and one of the witness has also stated that he was tortured for extracting statement from him. There is no investigation conducted about procurement of raw material of allegedly clandestinely cleared goods. Further unless criteria is provided through legal provisions to charge duty on the basis of capacity of production or consumption of electricity the same cannot the basis for allegation of manufacture of goods and their clandestine removal. Appeal allowed - decided in favor of appellant. - E/1968-1970 & 1976-1977/2010-EX[DB] - A/70730-70734/2017-EX[DB] - Dated:- 24-7-2017 - Mr. Anil Choudhary, Member (Judicial) And Mr. Anil G. Shakkarwar, Member (Technical) Shri Anurag Mishra (Advocate) for Appellant Shri Rajeev Ranjan (Joint Commissioner) AR for Respondent ORDER Per : Anil G. Shakkarwar Above stated appeals are arising out of common impugned Order-in-Original No.05/CE/Commr./2010 dated 31.03.2010 passed by Commissioner of Central Excise Customs, Kanpur and, therefore, they are taken together for decision. 2. M/s Kurele Fragrances Pvt. Ltd. (hereinafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gupta, who was present during the search, could not give any record justifying their legitimate manufacture/storage. (v) At the premises of M/s. Rakesh Pan Bhandar, Sikandara, Kanpur Dehat 02 bags of Patel brand Gutkha (MRP ₹ 0.50/- each), each bag containing 37440 (=18 x 26 x 80) pouches, totaling 74880 pouches were seized since Shri Rakesh Chaurasia, owner, who was present during the search could not give any record of licit purchase of the same. (vi) At the premises of M/s. Vinod Forwarding Agency, 133/292, T.P. Nagar, Kanpur, certain G.R. books were seized. (vii) At the premises of M/s. Alok Road Lines, C-12, LML Chauraha, Panki Kanpur, 10 Bilty books were seized. (viii) At the residential premises of Shri Gyanendra Singh, owner of M/s. New Trimurti Carrying Corporation, Kidwai Nagar, Kanpur, blank Bilty books in huge numbers were recovered. Shri Gyanendra Singh informed the officers that he was engaged in transport business and was transporting Gutkha and Pan Masala, manufactured by M/s. Kurele Group, bearing the brands Patel , Gagan , Kisan , 'Fiza', etc. to Sitarganj, Shahjahanpur, Tilhar, Islamangar, Moradabad, Milakh, Kashipur, Badyum, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneral, DGCEI, DZU, New Delhi on 28.11.2006. It was stated in the said show cause notice that M/s. Vinod Forwarding Agency was booking Pan Masala/Gutkha manufactured by only two firms namely M/s. K.P. Pan Flavours and M/s. Kurele Chemical/ Kurele Fragrances and that M/s. K.P. Pan Flavours were having Gutkha with brand name Rajshree and KC and KF were manufacturing Gutkha with the brand name of Patel and Gagan . It was further stated that all the G.Rs related to transportation of Gutkha by M/s. Vinod Forwarding Agency which were resumed on 25.06.2004 and on 30.05.2006 and resumed on 09.05.2006 in case of M/s. Ashwani Tobacco by M/s. Vinod Forwarding Agency were compiled in 3 charts enclosed as Annexure A, B and C to the said show cause notice in which only those entires were segregated and compiled which were related to transportation of Kisan and Patel brands of Gutkha manufactured by KC and KF and transported by M/s. Vinod Forwarding Agency to the stations Etawah, Karhal and Farrukhabad. It was further stated in the said show cause notice that Shri Ram Prakash Dewakar has categorically admitted that the consignments of Gutkha/Mini Gutkha shown in Annexure A, B and C were relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be Patel brand only is not sated on the said G.Rs and that the recovered bilties do not show which brand of Gutkha was transported by them and that Ashok Kumar Dwivedi's statement was obtained under pressure. They further contended that Ashok Kumar Dwivedi's statement dated 08.11.2004 and 16.02.2005 were recorded in the case of M/s. K.P. Pan Flavours and he had clearly informed that the bilties recovered from his officer belong to transportation of Gutkha of M/s. K.P. Pan Flavours and that it cannot be concluded that except Rajshree Gutkha all other Gutkha booked to Etawah were only 'Patel' and 'Kisan' brand Gutkha. They further contended that the bilties recovered by the officers on their earlier search at the premises of M/s. K.P. Pan Flavours and M/s. Ashwani Tobacco Company do not relate to them and cannot be relied upon in the impugned show cause notice and that on the basis of said bilties the Department has also tried to create the demand against M/s. K.P. Pan Flavours and M/s. Ashwani Tobacco Company. They further contended that the bilties on the basis of which demand was created against them were forwarded by Shri Ashok Kumar Dwivedi to Invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the officers of DGCEI, Regional unit Kanpur pressurized him to write that on the basis of same of the bilties which was submitted in the case of M/s. Ashwani Tobacco Company Gutkha of Kisan brand and Patel brand manufactured by KC was transported. On the same date cross examination of Shri R.P. Dewakar, Authorized Signatory of KC was conducted during his cross examination he has stated that the officers pressurized him to write that Gutkha and Mini Gutkha were transported by their firm to M/s. Vinod Forwarding Agency and the correct position was that they had never transported any Gutkha through M/s. Vinod Forwarding Agency and that his statement was obtained by officers under pressure and duress. The cross examination of Shri Jung Bahadur Singh Chandel was also conducted on the same date. During the cross examination he has stated that the officers resumed the said loose slips from his residential premises and they took him to DGCEI office and asked him to sign all the loose slips which were recovered from the residential premises and further stated that the officers detained him in their office for the later hours and tortured him and at about 11:00 pm he lost his patience and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anpur and M/s. Kurele Chemicals Company, Kanpur. (4) Order in respect of M/s. Latex Chemicals, Kanpur: (a) I confirm the demand of Central Excise Duty amounting to ₹ 7,90,518/- and Education Cess of ₹ 15,810/-, under proviso to Section 11A (1) of the Central Excise Act, 1944. (b) I order for recovery of interest from the party on the amount of confirmed Central Excise duty till the date of actual payment under Section 11 AB of Central Excise Act, 1944. (c) I impose a penalty of ₹ 8,06,328/- upon them under Rule 25 of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944. (5) I impose a penalty of ₹ 10,00,000/- upon Shri Ram Prakash Dewakar, Director of M/s. Kurele Fragrances Pvt. Ltd., Kanpur and Authorized Signatory of M/s. Kurele Chemicals Company, Kanpur under Rule 26 of the Central Excise Rules, 2002. (6) I impose a penalty of ₹ 2,00,000/- upon Shri Sanjay Kumar Kurele, Director of M/s. Latex Chemicals, Kanpur under rule 26 of the Central Excise Rules, 2002. 4. Aggrieved by the said order appellants are before this Tribunal. 5. Heard the learned counsel for the appellant, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment has relied upon the statement of Shri R.P. Dewakar, Authorized Signatory of the appellant firm, wherein he has confirmed that Gutkha manufactured by M/s. Kurele Chemicals Company was transported through M/s. Vinod Forwarding Agency without payment of duty and without any accountal. Shri R.P. Dewakar in their retraction letter dated 31.05.2006 and 28.02.2008 categorically stated that his statement dated 30.05.2006 and 27.02.2008 was recorded by the officers under pressure, duress, physical and mental torture. He further stated that his statements are nothing; but dictated version of the officers. The learned Commissioner, Central Excise, Kanpur totally ignored the aforesaid retraction letter duly submitted by the appellant in their defence reply dated 14.09.2009. Even during the cross-examination it was admitted by Shri R.P. Dewakar, Authorized Signatory of M/s. Kurele Chemical Company that his statement was recorded under official pressure and duress. The learned Commissioner, Central Excise, Kanpur has not taken any cognizance of the cross-examination and retraction letter duly filed with the defence reply dated 14.09.2009. The observation of the Commissioner, Central Excise, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Gutkha without payment of Central Excise duty is not tenable at all. (7) He further relied on final order of this Tribunal in the case of M/s. Santosh Tobacco v/s C.C.Ex. Delhi-I reported at 2014(311) E.L.T. 465 (Trib.) and submitted that the aforesaid judgment of the Hon'ble Tribunal is affirmed by Hon'ble Delhi High Court as reported at 2016 (332) E.L.T. 793 (Del.) and that in the light of the above judgment of the Hon'ble High Court demand raised on the basis of GR's recovered by the officers in some other searches no demand can be raised specially when it does not mention name of Gutkha. Similarly in case of M/s. Chandan Tobacco Company v/s C.C.Ex. Vapi reported at 2014 (311) E.L.T. 593 (Trib-Ahmd.). The Hon'ble Tribunal, Ahmedabad Bench has expressed the same views as regard to the transport documents. He further submitted that in view of the above judgments the GR's of M/s. Vinod Forwarding Agency simply mentioning Gutkha without any brand name and which were recovered in some other cases and on the basis of which demand has been raised to some other manufacturers cannot be said to be as proof of clandestine removal against the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Therefore, in respect of the demand of ₹ 10,84,961/- and Ed. Cess of ₹ 21,700/- against M/s. Kurele Fragrances Pvt. Ltd., no evidence has been brought into the record to prove charges of clandestine removal against M/s. Kurele Fragrances Pvt. Ltd. as Annexures- B C is only related to M/s. Kurele Chemicals. (c) In case of M/s. Latex Chemicals Pvt. Ltd. (1) The demand of Central Excise duty amounting to ₹ 7,90,518/- alongwith Ed. Cess of ₹ 15,810/- has been demanded from M/s. Latex Chemicals Pvt. Ltd. on the basis of some Kaccha Bill Books(Challan books) recovered from the residential premises of ex-employee Shri Jang Bahadur Singh Chandel of M/s. Latex Chemicals Pvt. Ltd. The entire demand against M/s. Latex Chemicals Pvt. Ltd. is based on the aforesaid Kaccha Bill Books (Challan Books) and on the basis of statement of Shri Jang Bahadur Singh Chandel. The Revenue alleged in the show cause notice that the aforesaid Kaccha Bill Books (Challan Books) were prepared by Shri Jang Bahadur Singh Chandel on the basis of the said Kaccha Bill Books (Challan Books)and that the appellant has cleared laminated film without payment of Central Excise dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of record we find that the entire show cause notice is based on bilties/GR's claimed to have been recovered from M/s. Vinod Forwarding Agency, Kanpur. During the cross examination as stated in the foregoing paragraphs it has been established that the brand name of the Gutkha booked by M/s. Vinod Forwarding Agency has not been stated on the said GR s/bilties and it was only presumed by Revenue that wherever no mention of Rajshree is established said Gr s/bilties should be treated as if the said goods were booked by the appellants and that the said goods were having brand name of 'Patel' and 'Kisan'. Through the cross examination it has been very clearly revealed that the statements on the basis of which said show cause notice was issued were recorded under duress and all the submissions made in the statements were retracted by the witnesses and during the cross examination they have also stated that the statements were recorded under pressure by the officers and one of the witness has also stated that he was tortured for extracting statement from him. We have also found from the record that the GR's and bilties which were recovered from M/s. Vinod Forwarding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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