1995 (4) TMI 200 - AT - Central Excise

Summary

Issues:
Central Excise duty on loose cigarettes for personal consumption without accounting.

Detailed Analysis:

Factual Background:
The appellants, manufacturers of cigarettes, were found using loose cigarettes for personal consumption without accounting for them or paying the Central Excise duty. A show cause notice was issued, demanding duty payment of Rs. 1,05,496.88 for a specific period, along with penalties under Central Excise Rules. The Additional Collector confirmed the demand and imposed penalties, leading to the appeal.

Contentions:
The appellant's counsel argued that loose cigarettes are not excisable products until packed for sale, citing a previous tribunal decision. The respondent countered, referring to a prior tribunal order that upheld duty liability for similar circumstances. The appellant sought penalty waiver based on the previous tribunal's decision.

Judicial Analysis:
The Tribunal noted the previous decision involving the appellants and upheld the duty liability based on the nature of the taxable event and duty collection process. The Tribunal referenced legal provisions and Supreme Court rulings to support the imposition of duty on cigarettes consumed internally, despite arguments against excisability of loose cigarettes. The duty demand was upheld following the precedent.

Decision:
The Tribunal upheld the duty demand based on the previous decision's ratio. However, the personal penalties imposed were set aside, considering the specific circumstances of the case. The appeal was rejected, except for the modification regarding personal penalties.

This judgment clarifies the excisability of loose cigarettes used for internal consumption and emphasizes duty liability based on the manufacture of excisable goods, even if not yet packed for sale. The decision highlights the importance of legal precedents, statutory provisions, and administrative convenience in determining duty obligations and penalties in Central Excise matters.