TMI Blog2018 (12) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, it cannot be held that the appellants had not manufactured the goods during the impugned period. The appellants are manufacturers during the impugned period and paid the duty on the goods manufactured by them, therefore, duty on account of erroneous refund cannot be demanded on the allegation that the appellants were not manufacturers - appeal allowed - decided in favor of appellant. - Appeal No. E/61558, 61567-61570/2018 - FINAL ORDER NO. 63602-63606/2018 - Dated:- 5-12-2018 - Mr. Ashok Jindal, Member (Judicial) And Mr. Bijay Kumar, Member (Technical) Present for the Appellant: Shri R.K. Hasija, Advocate Present for the Respondent: Ms. Seema Arora, AR ORDER PER: ASHOK JINDAL The appellants are in appeal against impugned orders wherein the refund claim had already been sanctioned to the appellant under Notification No.56/02-CE dt.14.11.2002 have sought to be recovered along with interest and equivalent penalty on the ground that the appellants had not manufactured the goods and only issued cenvatable invoices enabling the buyers to avail inadmissible Cenvat credit. 2. As the facts in these appeals are common, therefore, these appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from ICC Madhopur. The Commissioner of Central Excise Jammu s report dated 21.052010 questioned the issue of SCNs to Meerut based recipients of raw materials, wherein it has been opined by the Commissioner that as per entries at borders, raw-materials were received by the appellants and DIC officers had regularly verified purchase consignments, range officers visited the factories of the appellants regularly for conducting PBC checks and nothing adverse was reported from the physically verified stocks and manufacturing activity. The appellants have installed diesel generator sets and expenses of purchase of diesel and maintenance of DG sets are on record. There is evidence in the form of certificates of physical finesses DG sets, pollution control department s visit to the premises. Further audits have been conducted by the department from time to time. Commissioner Central Excise Jammu earlier issued SCNs to the appellants alleging that the process undertaken by them does not amount to manufacture and later on those SCNs were dropped holding that the process adopted by the appellants amount to manufacture. All these evidences clearly show that there was manufacturing activity and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied. The SCNs of under-valuation are also in contradiction to the allegation that there was no manufacturing activity. Although the Commissioner has dropped the demands on account of under-valuation and yet passed a strange, unprecedented order holding that the demand in the under-valuation would revive in the event demand of account of no manufacture is dropped by the appellate authority. There is no discussion in the impugned orders as to how the buyers are related to the appellants so as to demand duty by applying the Rules of 9 and 10 of the Valuation Rules 2000 read with Section 4(3)(b). Neither there is any evidence nor there is the discussion in the impugned orders to the fact that so called related persons are also related as per clause (ii), (iii) or (iv) of Section 4(3)(b) of the Central Excise Act, 1944. There is nothing on record that there is the mutuality of interest between the appellants and the buyers. The impugned orders are totally silent on this issue. 7. Even though the demands have been dropped on under-valuation but the contingent demands on uncertain, contingent, future event cannot be sustained, being contrary to the rule of certainty governing tax adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rier. (ii) The Officers of District Industry Centre, who have assessed and fixed the capacity of manufacturing units, have been regularly verifying their purchase consignments. (iii) The Range staff had also been visiting these units for PBC Checks/verification of plant/machineries and reported nothing adverse against these units. 6. Therefore, it may not be strongly alleged with certainty that during the period 2005-2006 to 2008-2009, these 27 units have not purchased crude Mentha oil and therefore have not manufactured any Menthol products in their units at all. There is hardly any time left for further investigation to strengthen the case as process is very time consuming and most of these of units have closed their factories due to withdrawal of Central Excise Duty on all Mentha products w.e.f 27.02.2010. Thus, the investigation may not be in tune with the investigations conducted by the Central Excise Commissionerate Merrut-II. 11. We further take of the fact that the similar issue on identical facts came up before this Tribunal in the case of Nanda Mint and Pine Chemicals Ltd. vide Final Order No. 63177 / 2018 dated 28.08.2018, wherein this Tribunal ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... close scrutiny of the records, the following facts emerges: (i) Most of the consignments of raw material were found entered at the Toll barrier. (ii) The Officers of District Industry Centre, who have assessed and fixed the capacity of manufacturing units, have been regularly verifying their purchase consignments. (iii)The Range staff had also been visiting these units for PBC Checks/verification of plant/machineries and reported nothing adverse against these units. 6. Therefore, it may not be strongly alleged with certainty that during the period 2005-2006 to 2008-2009, these 27 units have not purchased crude Mentha oil and therefore have not manufactured any Menthol products in their units at all. There is hardly any time left for further investigation to strengthen the case as process is very time consuming and most of these of units have closed their factories due to withdrawal of Central Excise Duty on all Mentha products w.e.f 27.02.2010. Thus, the investigation may not be in tune with the investigations conducted by the Central Excise Commissionerate Merrut-II. 9. The said report also support the case of the appellant wherein it has been clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one on the basis of evidence produced before the Adjudicating Authority. As per Evidence Act evidence in totality is to be taken into consideration and therefore, finding recorded in the impugned Order by the Original Authority who passed the said Order dated 29/01/2010 is bad in law. The Original Authority did not understand the process either of assessments or of adjudication. Further the investigations were not undertaken to find out wherefrom the inputs were received by the appellant for the goods they manufactured and on which they paid duty and which were exported, if they had been received the inputs from M/s Ruchi Infotech System, Jammu or the other suppliers of inputs. Further, the additional evidence submitted by the appellant indicated that in respect of units in Jammu, Central Excise Officers visited the factory premises and seen that the manufacturing process going on was evidence by them and such evidences being on record and submitted by the appellant it was the duty of the Original Authority to accept them and not to discard by saying that the Officers have not seen the goods being manufactured by their own eyes. Further, the receipt of inputs was verified by the Of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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