TMI Blog2021 (1) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise ECC No. ACSPP9687QM001. Assessee had filed their last declaration on 27-12-2012 and had declared RSP of ₹ 3/- on pouch and they were paying duty for one PPM, under section 3A of Central Excise Act, 1944 and Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010. Central Excise officers, visited factory premises of Assessee on 03.09.2014 and found one undeclared Pouch Packing Machine [PPM] having packing material roll on with printed RSP ₹ 4/-, which was seized. Duty in respect of seized PPM - HELD THAT:- Compounded levy under section 3A is on deemed production and excise duty is leviable as notified on number of packing machines in factory of manufacturer under Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 read with section 3A (2) and (3) of the Central Excise Act, 1944. The monthly deemed production per PPM is prescribed on the basis of average speed of machines and average working hours of factory. Central Excise duty is at rates notified on the basis of Retail Sale Price (RSP) slabs on per machine, Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns in cross examination seems to be their true statements. We also find from statements recorded initially and depositions of relevant witnesses under section 9D of Central Excise Act 1944 before the learned Commissioner, it becomes amply clear that the seized PPM was brought in the factory on 01-08-2014. We have also perused relevant affidavits and relied upon pages of diaries seized from the premises of supplier of PPM. The objective of cross examination was to ascertain actual date of receipt of seized PPM in the factory of assessee and installation thereof. We have also considered all argument and submission made by Authorized Representative (AR) on behalf of the Revenue. We do not agree with contentions of AR that statement in cross examination without any documentary evidences cannot be accepted as evidence that Such depositions in cross examination are retractions and after thoughts only without having any basis to give date of receipt of PPM on 01-08-2014 - the recording of statement in inquiry is not enough but it has to be with fully conscious application of mind by adjudicating authority that statement is required to be admitted allowing opportunity of cross examination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been manufactured by Assessee or removed from factory by Assessee. Therefore, we find that seized PPM is not at all liable to confiscation under Rule 18(1) ibid. The confiscation of PPM and fine of ₹ 10,000/- deserves to be vacated and set aside. We vacate confiscation of seized PPM and set aside Redemption fine of ₹ 10,000/- imposed by the impugned order. Imposition quantification of Penalty - HELD THAT:- The provisions in Central Excise Act 1944 provides that even if short payment or non-payment of excise duty detected by self or pointed out by officers, voluntary duty compliance of duty is encouraged to reduce litigation. In this case, entire duty determined and interest stand deposited. Appellant deserves leniency on penalty. Assessee on payment of duty with interest is eligible to reduced penalty @ 10 % u/s 11AC(1)(a) ibid. Assessee is eligible for closure of proceedings only on payment of duty and interest for September 2014. But, for August 2014, the penalty u/s 11AC(1)(a) shall be ten per cent of duty. Thus, for August 2014, duty of ₹ 29,56,000/- is payable with interest and penalty @ 10 %. This entire case is based on statements without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri P.P.Jadeja, Consultant for the Appellant Shri. H.K Jain, Assistant Commissioner (AR) for the Respondent ORDER M/s Hasmukh Tobacco Products, (referred to as the Assessee) is aggrieved by O-I-O No.AHM-EXCUS-002-COMMR-13-2019-20 issued on 27-12-2019 by Learned Commissioner, CGST Central Excise, Ahmedabad-North. Out of duty demand of ₹ 3,00,02,002/-, raised by SCN dated 19-02-2015, demand of ₹ 1,76,47,000/- with interest and 25 % penalty has been confirmed against which Assessee and its Authorized signatory have filed Appeal Nos. E/10340/2020 and E/10341/2020 respectively. Rest of demand of duty for ₹ 1,23,55,000/- has been dropped by said O-I-O, against which revenue has filed Appeal No. E/10352/2020, through Commissioner, CGST Central Excise, Ahmedabad-North and Assessee has filed cross objections No. E/Cross/10288/2020. Thus, both sides have filed Appeals against the same O-I-O No. AHM-EXCUS-002-COMMR-13-2019-20 dated 27-12-2019. Both Appeal No. E/10340 10341/2020 by the Assessee and its authorized signatory as well as Appeal No. E/10352/2020-DB by Revenue with CO No. E/Cross/10288/2020 therein have been taken up for hearing together on 02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ahmedabad on 09.09.2014 in presence of Shri Harish Kanaria alias Rajubhai Panchal, proprietor. They were engaged in manufacture and repairing of Pouch Packing Machines. Two diaries were withdrawn from the said premises under Panchnama dated 09.09.2014 which contained details of repairing and selling of PPMs to customers. Statement of Shri Harish Pravinbhai Kanaria @ Rajubhai Panchal, proprietor of M/s. Vaibhav Packaging was recorded on 09.09.2014 wherein he stated to have assembled one PPM and delivered to M/s Hasmukh Tobacco Products, in last week of October, 2013; that said machine was delivered by tempo of Shri Santhoshbhai; that after delivering machine, he visited to make PPM working. Statement of Santoshbhai Ishwarbhai Patel, owner-cum-driver of tempo loading rickshaw No. GJ01BX9106 was recorded on 10.09.2014 wherein he corroborated statement of Shri Harish Pravinbhai Kanaria @ Rajubhai Panchal, of M/S Vaibhav Packaging and stated that he delivered PPM in the last week of October, 2013 from M/s. Vaibhav Packaging to M/s. Hasmukh Tobacco Products, in his tempo and that PPM was unloaded there with help of 3-4 labourers working in that factory. 2.1 Thereafter, another stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was ordered for settlement vide the Commission s Final Order No. 121/CEX/WDN/2016 dated 29.07.2016, on payment of the entire duty of ₹ 300.02 Lakhs with applicable interest, penalty of ₹ 25 Lakhs and Redemption Fine of ₹ 10,000/- in lieu of confiscation of the seized PPM. The Hon'ble Commission granted immunity from prosecution subject to the payment of the remaining duty the penalty. 4. Being not satisfied with Order of Settlement Commission, Assessee filed SCA No. 16871 of 2016 in the Gujarat High Court against Order No. 121/FINAL ORDER/CEX/WDN/2016 dated 29.07.2016 wherein, the Hon'ble High Court vide interim Order dated 04.10.2016 directed Assessee to deposit full duty amount. The Assessee paid entire duty of ₹ 300.02 Lakhs [₹ 1,39,60,836/- deposited before SCN + ₹ 1,60,39,166/- after SCN = 300.02 lakhs] and deposited amount of Redemption Fine of ₹ 10,000/- vide Challan No. 80040 dated 11.10.2016. The Hon'ble Gujarat High Court passed Order dated 12.10.2017 in SCA No. 16871 of 2016, wherein the matter was remanded to the Settlement Commission for decision on the aspect of operating machine and to ascertain that seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inly stating that the additional machine [PPM] found in the factory on 03-09-2014 was brought in the factory only on 01.08.2014. Assessee has also disputed their total excise duty liability. They submitted that duty for September, 2014 on RSP ₹ 4/- was paid by them in the month of September 2014. Assessee had also requested the adjudicating authority to drop the demand and not to impose any penalty either on the firm or on the other two notices. 8. O-I-O No. AHM-EXCUS-002-COMMR-13-2019-20 dt. 27-12-2019 issued by Commissioner, Central GST Central Excise, Ahmedabad North, partially allowed request of Assessee and confirmed demand of Central Excise duty of ₹ 1,76,47,000/- with interest reduced penalty @ 25 % of duty confirmed, which stand appropriated from deposit of ₹ 300.02 lacs. O-I-O imposed a separate penalty of ₹ 2,00,000/- on authorized signatory shri Hasmukhbhai Patel under rule 26 of Central Excise Rules, 2002 and refrained from imposing any penalty on Shri Maheshbhai Patel, Proprietor of M/s. Hasmukh Tobacco under rule 26 of Central Excise Rules, 2002. Hence, Assessee and its Authorized signatory filed Appeal Nos. E/10340/2020 and E/10341/2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o evidence that it was installed or whether it was operating packing machine which would be attracting levy of duty from 01-11-2013 or 01-04-2014, when seized PPM was brought into factory on 01.08.2014. He submits showing photographs of seized PPM that PPM was not installed. He submits that O-I-O wrongly confirmed duty from 01.04.2014 when the machine in-question was brought into factory only on 01.08.2014. Hence, no duty could have been confirmed before 01-08-2014. He submits with reference to the Rule 18(2) of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 under which duty is confirmed by O-I-O that duty may apply from 1st April of relevant year, unless evidence to the contrary is provided by unregistered unit. However, in this case it is clearly established through evidences that the said seized PPM was brought in factory from 01-08-2014. It is crystal clear that Additional PPM after cross-examination of witnesses including supplier of machine, transporter of machine, laborers who had unloaded machine have stated to be received on 01.08.2014. When it was brought in factory on 01-08-2014, it can not be ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hasmukh Tobacco Products (b) Statements of Shri Hasmukhbhai Patel, Authorized Signatory and his deposition during cross examination on 21.10.2019 to support that Pouch Packing machine seized on 03-09-2014 was in fact brought in the factory on 01.08.2014. (c) Statement of Shri Harish Kanadia, Prop. of M/s Vaibhav Packaging, machine supplier and his notarized affidavits produced during cross examination on 09.10.2019 to support that the said machine was brought in the factory on 01.08.2014. (d) Statement of Shri Santosh Patel, transporter-cum-driver of who during his cross examination on 09.10.2019 deposed that the said PPM was brought in the factory on 01-08-2014 and to support his contention has also submitted an affidavit. (e) Notarized affidavit produced by S/Shri JayantibhaiManaji Khat, BhikhajiPoonaji Thakore and Shaileshbhai Manubhai Thakore, who unloaded the machine on 01.08.2014 in the factory during their cross examination to support that the said machine was brought in the factory on 01.08.2014. (f) Records of Production and clearance for the period from 2012-13 to 2014-15. (g) Electricity consumption Bills from May 2012 to November 2014 along with certif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan for ₹ 36,82,000/- dated 01.09.2014, ₹ 15,00,000/- dated 3.09.2014, ₹ 21,00,000/- dated 08.09.2014 and ₹ 3,60,836/- dated 11.09.2014 and intimated with statutory Form-1 and Form-2. Thus, the duty for September 2014 was paid in the September 2014. O-I-O in its para 77 has noted contention of Assessee. But, O-I-O has not reduced the duty paid for September, 2014 while confirming duty from April 2014 to September 2014. Assessee has filed statutory return ER 1 reflecting this duty payment for two machines on RSP of ₹ 4/-for September 2014. Fact of payment of duty for September 2014 was not correctly considered in O-I-O. He submits that since Duty for September 2014 was deposited in September 2014, second proviso to the Rule 9 ibid allows to recover Interest u/s 11AA ibid on the outstanding amount, for September 2014, starting with first day after due date till date of actual payment of outstanding amount. Assessee submitted that confirmation of duty of ₹ 36.82 lakhs has increased undue consequential liability of interest and penalty. O-I-O confirming duty with interest penalty for September 2014 which was deposited in September 2014, is not ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidences brought on the record; that Depositions given by concerned witnesses in cross-examination before ld Commissioner under section 9D of Central Excise Act 1944 in adjudication proceedings are original evidences to clarify correctness of statement given in investigation. Hence, deposition under section 9D ibid are original evidence and can never be considered as any retraction from statement given in investigation. Decisions relied upon by Revenue in Appeal are objected/distinguished in detail by Assessee in the CO. These decisions are not relevant or applicable in facts of this case. Revenue s Appeal No. E/10352/2020-DB deserves to be rejected. 12. Shri Jadeja submitted that applying the ratio of the judgments in the present case, mere statement of the persons cannot be a conclusive evidence for establishing clandestine removal. The Hon ble Gujarat High Court in case of Sakeen Alloys Pvt. Ltd. [2013 (296) ELT-392(Tri - Ahmd)] observed that confessional statement in absence of any cogent evidence cannot make the foundation for levying the excise duty on the ground of evasion of tax. It is also well settled by the Hon ble Tribunal and other higher forums that in cases of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot proved in absence of evidences of such requirements, the subsequent question of clandestine clearance does not arise. Hence, when clandestine manufacture is not proved, clandestine removal can not be proved. In support of submission, we would also like to rely on the decision in the case of CCE, Ahmedabad-I Versus Gopi Synthetics Pvt. Ltd - 2014 (302) E.L.T. 435 (Tri. - Ahmd.), which was also upheld by the Hon ble Gujrat High Court in Tax Appeal as reported in 2014 (310) E.L.T. 299 (Guj.). The Hon ble Tribunal held that charges of clandestine removal requires to be proved by sufficient evidences and cannot be decided on the basis of some documents which is the only piece of evidence which may at the most create a suspicion but not evidence and therefore the demand was dropped. Submissions on the quantification of demand of duty, confiscation and penalties are attached separately with chronology of dates and events for reference. The submissions on behalf of Assessee and its authorized signatory are summerised as under with the following prayers : (a) The seized PPM was brought in the factory only on 01-08-2014 (b) The said PPM was brought for use as alternative PPM and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same could have been further investigated by the department. In view of all discrepancies the same cannot be relied upon. He submits that Cross examination of three labourers, who stated that machine was brought in factory on 01-08-2014 and submitted affidavits dated 11-07-2015; that Department has not recorded their statements and all 3 were employees of appellant who wanted cross examination. So the result was most expected. How can they remember exact period of installation unless they were told by appellant to do the same. He submits that it is settled that statement made by witness or party under section 14 is ex facie admissible in evidence. He submits that in the present case all the statement have been given voluntarily and in few cases affidavits have been filed late without giving reason for delay and any sort of evidence that they were also pressurized. He pointed out that Shri Hasmukhbhai and Maheshbhai both were arrested on 21-10-2014. Their bail applications were initially rejected by Metropolitan Magistrate and by the Hon'ble Ahmedabad City Session Judge. He submits that before the Hon'ble settlement Commission appellant had been making different claims on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd quantification of Central Excise duty amount. (b) Determining rate of duty and Quantification of duty under Notification No. 16/2010-CE dated 27.02.2010, for a month(s). (c) Whether seized machine found excess on 03-09-2014 was actually Operating Machine or not is to be ascertained as directed by the Hon ble Gujarat High Court in SCA No. 16871 of 2016 in this case. (d) To ascertain from which date it was operative i.e. from 01-11-2013, as contended by Revenue or from 01-08-2014 as claimed by Assessee. (e) Evidentiary value of statements in term of section 9D of Central Excise Act 1944 with without examining witnesses u/s 9D ibid for confirming the demand of Central Excise duty by revenue. (f) Whether Confiscation of PPM is sustainable when it is not manufactured and removed by M/s Hasmukh Tobacco Products. Consequential Redemption Fine imposed on M/s Hasmukh Tobacco Products is justified or not. (g) In absence of seizure of goods manufactured or cleared by Assessee, whether Penalty imposed on Assessee and its authorized signatory under section 11AC of the Central Excise Act would be justified or not. 14.1 We find that M/s Hasmukh Tobacco Products engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting packing machines during any month shall be equal to number of pouch packing machines installed in the factory during that month. Rule 7 provides for the calculation of the Duty payable. Rule 8 specifies that in case of any addition or installation or removal or un-installation of a packing machine in the factory during month, number of operating packing machines for month shall be taken as maximum number of pouch packing machines installed on any day during month, provided that in case of non-working of installed packing machine during month, for any reason whatsoever, same shall be deemed to be an operating pouch packing machine for the month. Rule 9 ibid provides the manner of payment of the duty and the interest. 14.3 In the present case, the SCN dated 19-02-2015 has demanded total duty of ₹ 300.02 lakhs from November 2013 to September 2014, based on statements. The O-I-O dated 27-12-2019 has confirmed duty of ₹ 1,76,47,000/- from 01-04-2014 to 30-09-2014. Rest of demand of duty of totally ₹ 1,23,55,000/- has been dropped. O-I-O has given just and fair findings in O-I-O Para 54 to 57 for his conclusion that seized PPM was not operating Machine w.e.f. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osh; and that he had spent ₹ 40,000/- on said PPM which included cost of spare parts amounting to ₹ 21,460/- details of which are written in diary. He explained contents on other pages of seized diaries, none of which pertained to assessee. Perusing his statement recorded on 09.09.2014, Shri Harish Kanadia stated that he had wrongly stated earlier that he had supplied one PPM to M/s Hasmukh Tobacco Products during October, 2013 and that his present statement is true and correct as the said PPM was actually supplied after carrying out repair works for ₹ 40,000/- and that it was delivered on 01.08.2014. He also submitted one affidavit dated 10.07.2015. (iii) It is seen from cross-examination on 21-10-2019 of Shri Hasmukhbhai Patel, that the officers of Central Excise had conducted search at their factory on 03.09.2014 and had recorded his statements on 03.09.2014,_12.09.2014, 21.10.2014 and 02.01.2015. He stated that only one PPM was functional and another PPM was not functional; and that he had given his statement on 03.09.2014 that said non-functional PPM was purchased by them for ₹ 50,000/- and got the same repaired by Shri Rajubhai (Shri Harish Kanadia) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements recorded initially and depositions of relevant witnesses under section 9D of Central Excise Act 1944 before the learned Commissioner, it becomes amply clear that the seized PPM was brought in the factory on 01-08-2014. We have also perused relevant affidavits and relied upon pages of diaries seized from the premises of supplier of PPM. The objective of cross examination was to ascertain actual date of receipt of seized PPM in the factory of assessee and installation thereof. We have also considered all argument and submission made by Authorized Representative (AR) on behalf of the Revenue. We do not agree with contentions of AR that statement in cross examination without any documentary evidences cannot be accepted as evidence that Such depositions in cross examination are retractions and after thoughts only without having any basis to give date of receipt of PPM on 01-08-2014. We approve Assessee s contention that depositions under section 9D ibid before learned Commissioner are original evidences and they can not be considered as any type of retractions or after thought. We agree with contentions made on behalf of Assessee on this point. We hold that it is settled law th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statements are sought to be relied upon at the stage of adjudication to make available the said witnesses for cross-examination so that it could be established whether the statements recorded from the said witnesses have been voluntarily given and/or are relevant for the issue or based on personal knowledge or hearsay and the like. The object, being that a Tribunal or Court conducting a proceeding either before the Court or quasi judicial tribunal in adjudication, must have the true evidence and shift the evidence to weed out the chaff from the grain. Another reason being to satisfy itself that the person whose statement was recorded had made it voluntarily and based on his personal knowledge or legal records which can come out in cross-examination. This is to ensure the Court or Tribunal or the authority conducting the proceeding arrives at the correct conclusion based on tested evidence before it. The issue also is no longer res integra in view of the large number of judgements of the Supreme Court. In case of 2016 (340) E.L.T. 67 (P H) - JINDAL DRUGS PVT. LTD vs UOI, the Hon ble P H High Court has held as under in para 19 19 . Clearly, therefore, the stage of rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty that, before admitting such a statement in evidence, clause (b) of Section 9D(1) mandates that the evidence of the witness has to be recorded before the adjudicating authority, as, in such an atmosphere, there would be no occasion for any trepidation on the part of the witness concerned. In case of 2013 (294) E.L.T. 353 (Del.) - BASUDEV GARG vs CC, the Hon ble Delhi High Court has held as under in para 10 14 10 . Insofar as the general propositions are concerned, there can be no denying that when any statement is used against the assessee, an opportunity of cross-examining the persons who made those statements ought to be given to the assessee. This is clear from the observations contained in Swadeshi Polytex Ltd. (supra) and Laxman Exports Limited (supra). Apart from this, the decision of this court in J K Cigarettes Ltd. (supra) clinches the issue in favour of the appellant. In that case, the validity of Section 9D of the Central Excise Act, 1944 was in question. 14 . The Division Bench also observed that though it cannot be denied that the right of cross-examination in any quasi judicial proceeding is a valuable right given to the accused/Noticee, as thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements dated 03-09-2014 and 21-10-2014 he has stated that seized PPM was brought in their factory on 01-08-2014. Thus, instead of adducing any such reliable, clinching evidence, Revenue has contended to ignore or discard evidences brought on record during the cross examination of all the above witnesses, without there being any contra evidences produced. We are of the view that a rational, logical and fair interpretation of procedure clearly spells out that before the statement is treated relevant and admissible under law in terms of section 9D ibid, Adjudicating Authority is obliged under law to examine person and allow cross examination to admit evidence in interest of justice. Therefore, we are of the view that recording of statement in inquiry is not enough but it has to be with fully conscious application of mind by adjudicating authority that statement is required to be admitted allowing opportunity of cross examination of witness. This provision could not be done away with by the adjudicating authority, if he is inclined to take into consideration the statement recorded earlier during investigation by Investigation officers. 14.7 Without examination and cross examinatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of O-I-O is not correct view considering Instructions contained in the Audit Manual produced by Assessee. The evidences pointed out by Assessee which are brought on record during investigation and cross-examination of witnesses that seized PPM was brought in factory of Assessee from 01-08-2014 are acceptable evidences, which are already reflected in Para 9 supra and hence the same are not reproduced here again. 14.8 Similarly, we have also critically examined validity of duty demand from 01-04-2014, as confirmed by this O-I-O dated 27-12-2019, in terms of the Rule 18(2) of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010. Both the sides have objected and not agreed for this type of theory for confirmation of the duty demand. Therefore, it is very relevant to refer to the said provision of Rule 18(2) and it would be necessary to go through the said Rule 18(2) ibid which is reproduced as under :- 18. Penalty for contraventions, etc. - (1) Subject to the provisions of rule 16 and section 11AC of the Act, if any manufacturer produces or removes notified goods in contravention of any provision of these rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.9 Now, when the facts are crystal clear that the seized PPM was brought in the factory on 01-08-2014, what will be the duty liability of assessee from 01-08-2014 also requires to examined and considered. 14.10 Regarding, duty liabilities for August 2014, Assessee has contended with reference to the screenshots [Photographs] of seized PPM submitted with the synopsis that it was found lying. The contention of Assessee that PPM seized on 03-09-2014 was not operating machine per se, can not be accepted just like that without going into its other factual details. Assessee states that in investigation and cross examination of witnesses, seized PPM was brought in the factory of Assessee from 01-08-2014 for its alternative use, in case main PPM fails working and that seized PPM was not used in August 2014 and that both PPM were also not used together. Assessee s contentions are not acceptable that seized PPM was not in working condition and officers have not conducted any technical inspection of machine to establish its exact condition as operating Machine can not be acceptable as Assessee has not produced evidence to prove their contention. Assessee s contention that seizure P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it can be easily connected to electric plug with a wire cord. Electricity connection Board/plugs are also found there. (d) While seeking their bail before Hon ble Courts in Ahmedabad, Assessee had accepted their duty liability from August 2014. (e) When Assessee had approached Hon ble Settlement Commission and the Hon ble Gujarat High Court, they had accepted their duty liability from August 2014. (f) During adjudication, during cross examination and EA-3 Appeal submissions, synopsis etc Assessee has vehemently submits that duty can not be fasten on them before August 2014. But, they have not seriously objected duty liability for August 2014, which is even otherwise payable in Compounded levy u/s 3A and Tobacco Rules and Notification No. 16/2010-CE dated 27.02.2010 as amended. 14.11 In view of the above, we find that since the Assessee confirm the receipt of seized PPM in factory on 01-08-2014, contention of Assessee that duty is not payable for August 2014 is not sustainable. Therefore, we hold that duty of ₹ 29,56,000/- for August 2014 is required to be recovered under Section 11A(10) of Central Excise Act, 1944 read with Rule 7 of Chewing Tobacco and Unmanuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber 2014 having discharged with some additional amount of ₹ 2,78,836/- deposited, which needs to be appropriated towards their interest liability, if any. There is no duty liability outstanding except interest liability for a few days to be calculated by the Central Excise Officers for September 2014. We hold that there can not be any penalty for September 2014. However, we also make it clear that at the same time the Assessee would also not be eligible to claim any consequential benefit for amount of ₹ 36,82,000/- deposited towards duty for September 2014, which is even otherwise their duty liability and it has also to be appropriated. 14.13 As regards, imposition of Redemption Fine, we agree with the contention of the Assessee that Rule 25 of Central Excise Rules, 2002 is not applicable, when a specific provision has been made under Rule 18(1) of Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 for confiscation and penalty. The Rule 18(1) ibid provides that notified goods produced or removed shall only be liable to confiscation. We agree with the contention of the Assessee that the seized PPM i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to be set aside. We allow Appeal filed by Shri Hasmukhbhai Patel and set aside the penalty imposed on him. 14.17 We have perused the grounds of Appeal No. E/10352/2020 filed by Revenue and cross objections filed therein by Assessee. However, we have already held that O-I-O has given clear judicious, legal and proper findings to show that considering evidences on record, the duty liability cannot be determined from November 2013. Findings in O-I-O Para 54 to 57 for coming to conclusion that PPM was not operating Machine w.e.f. 01-11-2013 have already been upheld by us. We have held that duty demand from 01-04-2014 is also not sustainable. Assessee s Appeal has been partially allowed holding their duty liability for August 2014, Appeal No. E/10352/2020-DB filed by Revenue deserves to be rejected. Department in their Appeal No. E/10352/2020-DB have stressed on point that statements given by witnesses in investigation have been retracted in cross examination. We have already held that incorrect view is entertained by Revenue. We have noted that this entire case is based on statements without clinching, corroborative independent positive evidences on record produced by the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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