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2024 (11) TMI 985 - AT - Central ExciseClandestine removal - Gutkha pouches and related materials - retraction of statements - Confiscation of goods - 90 bundles containing 1872720 Gutkha pouches and related materials, three packaging machines - demand of duty with interest and penalty - HELD THAT - Undisputed facts of the case are that Gutkha pouches brand-named Raj Kolhapuri along with other related materials, three packaging machines and one lorry were seized by the Banavasi Police on 03.11.2009 which was later, with the intervention of the Central Excise Department, on direction by the Hon ble Principal JMFC was handed over to the Central Excise Department for further investigation. The said materials were again seized on 09.12.2009 and statements of persons were recorded again to ascertain the quantum of offence. From analysis of the statements, it revealed that the Gutkha and three packing machines were seized from the premises viz. House No.6, Plot No.21, Golikatta Village, Gudnapura 581 318, Banavasi, Sirsi Taluk Uttara Kannada which was given on rent by the owner of the said premises Shri Dhananjaya Krishna Hegde for a period of one month to the appellant by an understanding recorded on 28.10.2009 was manufactured in the said premises and cleared without payment of duty. The appellant from the very beginning expressed his ignorance about the said labourers and undertaking the manufacture of Gutkha in the said premises. However, no request for cross-examination of the witnesses was requested by the appellant before the adjudicating authority. Neither the appellant nor Mr. Dhananjaya Krishna Hegde, the owner of the said premises has claimed before the authorities that the Gutkha packed in the plastic pouches having mark of Raj Kolhapuri Gutkha belongs to them or the seized machineries have been claimed to belong to them and requested for its release to them. On the other hand, both of them denied being involved in the manufacturing of Gutkha in the said premises. Since duty paid character of the Gutkha has not been established and on the basis of the statements given by the labourers and lorry driver and retrieving the three machineries from the manufacturing premises, it is clear that the said Gutkha bearing name Raj Kolhapuri manufactured in the said premises and cleared without following procedure and discharging duty payable on the same. Consequently, the Gutkha as well as the three packaging machines and other related materials seized by Police on 03.11.2009 and later by Central Excise Department on 09.12.2009 are liable for confiscation and hence the order of the Commissioner directing the confiscation of the same does not require any interference. More or less, similar views expressed by the Tribunal in a series of cases, including the cases COMMR. OF C. EX., HYDERABAD VERSUS DHARIWAL INDUSTRIES LTD. 2010 (4) TMI 890 - CESTAT, BANGALORE ; GOYAL TOBACCO CO. PVT. LTD. SHRI RAJESH GOYAL, DIRECTOR VERSUS CCE ST, JAIPUR-I 2017 (3) TMI 57 - CESTAT NEW DELHI , COMMISSIONER OF CENTRAL EXCISE, DELHI-I, M/S KUBER TOBACCO INDIA LTD, SHRI DHANPAT SINGHEE, DIRECTOR, SHRI CHATAR SINGH BAID, SHRI VIKAS MALU VERSUS M/S KUBER TOBACCO INDIA LTD, COMMISSIONER OF CENTRAL EXCISE, DELHI-I 2016 (4) TMI 622 - CESTAT NEW DELHI Hence, the demand in absence of evidence of the nature narrated above being not adduced by the Department, hence cannot be sustained, only on the basis of the date of installation of electricity meter at the said premises. In these circumstances, the demand confirmed by the learned Commissioner is liable to be set aside. Accordingly, the same is set aside and consequently penalty imposed on the appellant under Section 11AC of the Central Excise Act, 1944 also set aside. The impugned order is modified to the extent of upholding confiscation of the seized goods, three machines and related materials; however, confirmation of demand, interest and imposition of penalty on the appellant is set aside. Appeal is disposed of.
Issues Involved:
1. Whether the 90 bundles containing 1,872,720 Gutkha pouches and related materials, three packaging machines seized by the Police/Central Excise Department are liable for confiscation. 2. Whether the duty demanded from the appellant with interest and penalty is sustainable. Issue-wise Detailed Analysis: 1. Confiscation of Seized Goods and Machines: The case involves the seizure of Gutkha pouches branded as "Raj Kolhapuri," along with related materials, three packaging machines, and a lorry by the Banavasi Police on 03.11.2009, which were later handed over to the Central Excise Department. The investigation revealed that the Gutkha and machines were seized from a rented premises, where Gutkha was manufactured without payment of duty. The appellant denied renting the premises or manufacturing the Gutkha, despite statements from the lorry driver and laborers indicating otherwise. The Tribunal found that the duty-paid character of the Gutkha was not established, and based on the evidence, including the retrieval of machines from the premises, the goods and machines were liable for confiscation. The Tribunal upheld the confiscation order by the Commissioner, finding no need for interference. 2. Sustainability of Duty Demand, Interest, and Penalty: The Commissioner had confirmed the duty demand based on the assumption that the machines were installed and used for manufacturing Gutkha from the date of electricity connection to the premises, i.e., 29.03.2007. However, the Tribunal found no investigation was conducted to verify the procurement of raw materials, electricity consumption, or transportation details. The Tribunal noted the absence of evidence showing the premises were leased to the appellant from 01.07.2008 or that manufacturing was carried out by another person. The Tribunal referenced similar cases where demands were not sustained due to lack of evidence. Consequently, the Tribunal set aside the duty demand, interest, and penalty imposed on the appellant, as the demand was based solely on the installation date of the electricity meter without supporting evidence. Conclusion: The Tribunal modified the impugned order by upholding the confiscation of the seized goods, machines, and related materials but set aside the confirmation of the duty demand, interest, and penalty on the appellant. The appeal was disposed of accordingly.
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