2018-TIOL-504-CESTAT-ALL

Ram Shiromani Verma Vs CCE & ST

CX - During search at unregistered premises of of M/s Shankar Traders and at factory premise of Shri suresh Kumar Verma, it was found that Shri Suresh Kumar Verma was engaged in manufacture of 'Shiv Baba Brand' scented Supari also called as Pan Samagri which was having retail sale price of Rs. 1 per pouch and said manufacture was being undertaken at 2 unregistered premises at Malipur Road and at Yahiya Kamalpur and at the said two premises, Shri Suresh Kumar Verma was also undertaking the process of packing raw unmanufactured tobacco having no brand name without mention of any retail sale price - The officers noticed that 4,91,400 pouches of chewing tobacco on which no brand was mentioned and 8,59,950 pouches of 'Shiv Baba Brand' scented Supari also called Pan Samagri were found in manufacturing premises and some quantity of raw material and packing material was also available - They had seized the entire quantity of raw materials available and all the 14 packing machines.

It has been very clearly stated in whole proceedings that Panch witnesses of Panchnamas and others concerned have stated in their statements and during cross examination that tobacco was being packed on machines in green colour paper on which no brand was mentioned and no MRP was mentioned and therefore contention of revenue that goods were branded to be not tenable in law - Supreme Court in case of Damodar J. Malpani has held that samples should be first sent for chemical analysis and thereafter the question of classification of product should be taken up on the basis of chemical analysis report and other materials - Therefore, it is binding on all to decide the classification of goods on the basis of report of CRCL laboratory on chemical composition of the samples which were drawn from manufacturing premises - It is found from SCN that CRCL has reported that sample was in form of brownish bits of leaves and it was containing tobacco and that it did not contain any added lime or flavouring agent.

Original Authority has held that goods manufactured by assessee were Shiv Baba Brand scented Zarda chewing tobacco - Tribunal did not come across any evidence in whole proceedings to establish that during the entire period of SCN, any of the 14 machines were engaged in manufacture of Shiv Baba branded scented Zarda chewing tobacco of RSP 50 Paise - On the contrary when officers visited the manufacturing premises, it was noticed that 6 machines put together in two premises were engaged in packing of unbranded unmanufactured chewing tobacco and there was no RSP mentioned nor brand name was mentioned on them and other 8 machines were engaged in packing of Shiv Baba brand scented Supari or Pan Samagri - Therefore, impugned Order-in-Original set aside insofar as confirmation of demand of duty is concerned - Since the demand does not sustain none of the penalties sustain - Further, goods confiscated were not manufactured in said raided premises, hence the confiscation does not sustain: CESTAT - Appeals allowed: ALLAHABAD CESTAT

2018-TIOL-503-CESTAT-KOL

Majlishi Biri Factory Vs CCE

CX - Assessee engaged in manufacture of hand-made branded Biris - A SCN was issued proposing confiscation of excess Biris and demand of duty and to impose penalties - Regarding the excess quantity of labeled packed Biris without packing sl.No. of 49,26,500 sticks, assessee submitted that said quantity was manufactured out of the un-baked Biris found short to the tune of 1,42,48,000 sticks - Assessee contended before adjudicating authority that 49,26,500 sticks of labeled and packed Biris found as "unaccounted" in non-duty paid godown is actually a part of 1,42,48,000 sticks of "Kachcha Biris" found in short in store-room - Assessee admitted a part of shortage of unbranded/unbaked Biris ascertained on basis of notebooks and disputed the demand of duty on balance quantity as Revenue failed to prove the charge of clandestine removal - Tribunal is unable to accept the contention of assessee for the reason that they cannot accept the evidence of note books partly, unless it has submitted a statement of reconciliation of said notebook - Assessee failed to reconcile the entries in notebooks and therefore, demand of duty on balance quantity, shortage of unbranded and unbaked Biris is justified.

Assessee had not placed any reconciliation of entries in notebooks with statutory records - Assessee had not disputed the recovery of notebooks from premises of assessee - It has also not disputed the corroboration of entries of note book and in seized "private packing serial register" - Therefore, the contention of assessee is without any force on this ground also.

Assessee accepted partly the shortage of unbranded/unbaked Biris by way of adjustment of excess labeled Biris based on the notebooks and rough private books - They cannot deny the demand of duty on balance quantity on the basis of same evidence, as they fail to clarify the details of entries in said notebook as observed by adjudicating authority - As it is a case of charge of clandestine removal of goods, imposition of penalty under section 11AC is warranted - In such situation, imposition of penalty on partners are excessive: CESTAT - Appeals partly allowed: KOLKATA CESTAT

2018-TIOL-502-CESTAT-DEL

Jain Sons Vs CCE

CX - Department carried out search operations at the premises of M/s. Jain Sons, M/s. New Jain Sales Corpn. and M/s. New Jain Sales Corpn.(shop) - Department investigated the allegation that both the above factories were wrongly availing SSI exemption by clearing goods clandestinely without payment of duty - The data contained in various electronic devices was printed out with help of a computer expert in presence of Shri Sushil Jain and Shri Mukesh Jain - The print outs were shown to the respective proprietors of units and their statements were recorded on different dates, in which they admitted that data pertained to clearances of goods from two units made clandestinely - SCN was issued proposing to demand duty from M/s. Jain Sons along with penalty of equal amount - From the impugned order, it is seen that Commissioner had initially permitted the cross examination of witness sought by assessee - It is also on record that two panch witnesses were also cross examined and their statements recorded before adjudicated authority - However, after taking over of a new officer as Commissioner, the cross examination of the rest of witnesses was disallowed - The applicability of provisions of section 9D of CEA, 1944 in adjudication proceedings before departmental authority was examined by Punjab and Haryana High Court in case G Tech Industries 2016-TIOL-2749-HC-P&H-CX - Keeping in view the observations of High Courts in cases of Flevel International 2015-TIOL-2230-HC-DEL-CX and Him Logistics Pvt. Ltd. 2016-TIOL-977-HC-DEL-CUS, the impugned order needs to be set aside and matter remanded to adjudicating authority - For satisfying the requirements prescribed 9D ibid opportunity for examination and cross examination of witnesses may be extended through an effective hearing to all connected parties - Additional evidence may also be admitted as per law: CESTAT - Matter remanded: DELHI CESTAT