2017 (2) TMI 1258 - AT - Central Excise

Clandestine removal - Gutkha - demand on the basis of entries made in the unloading registers and gate registers - Held that - the department has not checked the manufacturing capacity of the manufacturing assessee and also the vouchers at the time of booking the gutka from Delhi. The entire duty demand was based on the entries made in the unloading registers and gate registers. M/s. Supreme was also transporting gutka of other companies which were having the different trademarks like Goa 1000/Talab/Kuber & Moolchand, etc. No attempt was made by the department to examine the records of these manufacturers. Department has adopted a short-cut method by demanding the duty of the entire 63,346 bags reflected in the 13 unloading registers and gate registers. But the fact remains that the respondent-assessee was having the brand name of Rajshree and Safal and responsible to pay the duty on its trade marked stock only. The bags containing these trade marks were counted by the adjudicating authority for the purpose of duty. So, the duty was levied only on 2404 bags which were having the trade mark of Rajshree and Safal brand (in code also). The respondent-assessee is not for the duty payment for the brands which were not manufactured by them - there is no reason to interfere with the impugned order passed by the adjudicating authority. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal filed by the department against the order-in-original regarding duty demand.
2. Dismissal of the respondent-assessee's appeal due to non-maintenance of pre-deposit.
3. Discrepancy in duty demand on pouches containing tobacco with specific brand names.
4. Examination of evidence including unloading and gate registers.
5. Allegations of duty evasion and responsibility on the respondent-assessee.

Analysis:
1. The appeal was filed by the department challenging the order-in-original related to a duty demand issue arising from the manufacturing of pouches containing tobacco with specific brand names. The Commissioner confirmed a duty amount lower than the initial demand, leading to appeals from both parties. The respondent-assessee's appeal was dismissed due to failure to make a pre-deposit, prompting the department's appeal against the dropped demand.

2. The case involved the manufacturing activities of the respondent-assessee, focusing on pouches with brand names "Rajshree" and "Safal." A search at the premises of a transporter revealed discrepancies in the quantity of pouches bearing different brand names, leading to the duty demand dispute.

3. Evidence presented included unloading registers and gate registers, indicating the movement of goods between locations. The department argued that the entire stock mentioned in the registers belonged to the respondent-assessee, justifying the duty demand. Conversely, the respondent-assessee's counsel contested the claim, highlighting production capacity limitations and the presence of other brand names in the seized goods.

4. The Commissioner sustained the duty demand on pouches with the "Rajshree" and "Safal" brand names, while penalties were imposed on involved parties. The decision was based on the entries in the registers, with no verification of manufacturing capacity or cross-checking with vouchers during goods transportation.

5. The tribunal noted the department's oversight in not investigating other manufacturers associated with the transported goods bearing different brand names. Emphasizing the respondent-assessee's responsibility for duty payment on specific brand stocks, the tribunal upheld the duty levy on pouches with the "Rajshree" and "Safal" brand names, dismissing the appeal filed by the Revenue.

In conclusion, the judgment addressed the duty demand dispute concerning specific brand pouches, emphasizing the need for thorough examination of evidence and responsibility attribution in excise matters.