2004 (1) TMI 136 - AT - Central Excise

Demand - Clandestine manufacture and removal of beedies - Evidence - penalty - HELD THAT - A perusal of the letter dated 20-11-2003 of Jt. Commissioner (Review) Tirunelveli sent to JDR it has been admitted in the statement dated 29-4-1997 given by Shri Yesuvadiyan that there is no mention about the nature of biris sold that is branded or unbranded but what he had admitted was that he has manufactured biris and sold them in loose quantities that is in unpacked form. Hence the contention of the Revenue is that Shri Yesuvadiyan has admitted the unaccounted manufacture and illicit removal of loose biris that is in unpacked form. It is a common knowledge that loose beedies when they are not packed and labelled are not liable to pay Central Excise duty and are not known as labelled beedies. Loose beedies or unbranded beedies and sale of such beedies without payment of duty is legal and proper. The comments furnished by the Jt. Commissioner and the written submission made by DR are all based on assumption and presumption and therefore I do not find any infirmity in the order passed by the Commissioner (Appeals). I therefore sustain the order passed by the Commissioner (Appeals) and reject the appeal filed by the Revenue. Ordered accordingly.

Summary

Issues Involved: Appeal against setting aside of order confirming duty amount, penalty, and interest u/s 11A(1), 11AC, 11AB of Central Excise Act based on clearance of non-duty paid beedies.

Summary:
1. The Revenue appealed against setting aside the order confirming duty amount, penalty, and interest u/s 11A(1), 11AC, 11AB by the ld. Commissioner (Appeals) due to lack of evidence of clearance of non-duty paid beedies.

2. The Revenue contended that the admission statement by Shri Yesuvadiyan, regarding unaccounted tobacco biris used in manufacturing and clearance without duty payment, is crucial evidence. They argued that the retraction of the statement after a month does not negate its relevance, citing the Haroon Haji Abdulla v. State of Maharashtra judgment. The Revenue also highlighted discrepancies in statements by M/s. Kerala Transport Company and M/s. Kerala Trading Company, emphasizing the importance of timely and consistent information.

3. The Revenue's written submissions emphasized the importance of brand loyalty in biris marketing, the significance of evidence from raw material suppliers, and the lack of documentation supporting the allegations. They also noted the absence of an appeal on the penalty imposed on the purchaser.

4. The respondent argued that there was no evidence of clearance of branded beedies without duty payment and disputed the quantity of beedies manufactured and cleared without duty. They maintained that branded beedies were cleared after duty payment, and non-branded beedies were cleared without duty.

5. After reviewing the evidence and submissions, it was concluded that the Revenue failed to provide concrete evidence of clearance of branded beedies without duty payment. The absence of corroborative documentation or statements weakened the case against the respondents. The statement by Shri Yesuvadiyan regarding loose biris, not liable for Central Excise duty, did not establish the illicit removal of branded beedies. The order of the Commissioner (Appeals) was upheld, and the Revenue's appeal was rejected.